Congressman Camp seeking comprehensive tax retorm

In a speech on May 17, 2012, House Ways & Means Committee Chairman Dave Camp stated:

"If we are to unlock new opportunities for job creation and strengthen the economy, then we must take even larger steps toward comprehensive tax reform.  At the Ways and Means Committee, we have established a framework for comprehensive reform that brings the corporate and the individual rate in line at a top rate of 25 percent on both sides."

As part of reform, he noted that Republicans support:

• "Collapse the six rates on the individual side to two rates of 10 and 25 percent; 
• Eliminate the AMT, which should have been named the “alternative maximum tax;” and 
• Move from an outdated worldwide system of taxation to a more competitive territorial system"

But then details on how to get there are missing.  These rates are lower than we have today with the "Bush tax cuts" and we can't afford that.  It seems that there will have to be significant base broadening which means removing many deductions, exclusions, special rates and tax credits.  Generally, that would be a good idea because a tax with a broad base and lower rates is more likely to meet principles of good tax policy.  I only say "generally" here because without details, we don't whether some special rules will remain or even be added that might adversely affect equity, transparency, neutrality or simplicity.

I applaud Congressman Camp and think he can move us to tax reform.  He has held many hearings on various aspects of tax reform in the past two years.  He provided legislative language on a territorial approach rather than just a general framework.  Without legislative language, we aren't moving towards reform, we are just discussing and discussing and discussing.

In his speech, Congressman Camp invited everyone to come to the table with their ideas.  He cautioned though that if you're coming just so you can stay in your corner and hold your ground on some tax provision you demand to stay in the law, you need to rethink your stance. 

He stated:

"I’ve already heard from a number of different industries regarding items they believe must be preserved as we embark on tax reform.  My response has been and will continue to be the same to each and every one: tax reform cannot be achieved if everyone retreats to their four corners. That has happened too many times, and it’s why we are now struggling under the weight of a tax code that bears significant responsibility for the sluggish economic recovery.

So, come to the table – with your ideas, your thoughts, and a desire to work with your job-creating colleagues, and the men and women you employ, so that we can create a path for comprehensive tax reform that is worthy of the people we live and work with every day."

What do you think?