If the tax reform proposal unveiled earlier this week by Ways and Means Committee chairman Dave Camp is really “dead on arrival,” as some have suggested, why has virtually every organization with a stake in the tax process made an effort to comment on it? After all, it’s just a discussion draft.

Well, for one thing, it sets up signposts for whatever efforts are made later. “The details are likely to serve as a template for future proposals,” said Don Williamson, CPA, Esq., executive director of the Kogod Tax Center at American University.

“It does, in fact, broaden the base and lower the rates,” he noted. “It is intended to strengthen the economy by lowering the rates. The premise is that there would be more money in people’s pockets to buy things. However, I don’t consider it real simplification. There will still be a lot of business for tax preparers and accounting firms.”

“I think that it’s a substantial piece of work and it helps move the ball forward for tax reform,” agreed Rachelle Bernstein, vice president and tax counsel at the National Retail Federation.

“It’s remarkable that the chairman was able to reach a 25 percent corporate rate, and do it on a revenue neutral basis,” she said.

And dynamic scoring by the Joint Committee on Taxation shows that the economy and jobs would grow as a result of changes made under the proposal, Bernstein observed. “It’s good for the retail industry, since when the economy and jobs grow, retail consumer spending will grow.”

In a sense, it depends on whose ox is being gored. Any proposal that broadens the base while lowering the rates has to take away or reduce some of the deductions, credits and exemptions that are a part of today’s Tax Code. And for every deduction, credit or exemption, there are individuals, groups and whole industries that are affected. Among the provisions that would be eliminated, according to the Tax Foundation, are the deduction of interest on education loans, the adoption tax credit, the credit for green energy residential improvements, the credit for qualified electric vehicles and alternative motor vehicles, the first-time homebuyer credit, and the deductions for tax preparation expenses, medical expenses and moving expenses.

In addition, it would reduce the principal cap for the home mortgage interest deduction from new mortgages from $1 million to $500,000 over four years, and it would reduce the maximum credit for the Earned Income Tax Credit to $200 for joint filers with no children, $2,400 for filers with one child, and $4,000 for joint filers with two or more children.

Every one of these provisions has their concerned supporters, and we can be sure that we’ll hear from them in the ensuing weeks.

Nevertheless, the proposal is a monumental work, according to Bernstein. “It’s very important, whether or not this particular proposal, as drafted, gets enacted in 2014. The 1986 Act took years to move forward,” she said. “I would equate this to the Bradley-Gephardt proposal [from former Sen. Bill Bradley, D-N.J., and Rep. Richard Gephardt, D-Mo.], which was the first of the proposals back in the 1980s. It wasn’t scored as much as the joint tax committee did on this one, but any history of tax policy will say how that piece of work was so fundamentally important to the work which led to the ’86 Act.”

The work that Camp has done should be viewed similarly. This is the most comprehensive tax reform plan we’ve seen put forward since the ’86 Act. I would discount the ‘dead on arrival’ language. This will be a basis for working on tax reform in the future.”

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