The Republican chairman of the House committee with jurisdiction over tax policy on Thursday added his voice to the growing chorus of conservatives who say they want to simplify the tax code.
Dave Camp, chairman of the House Ways and Means Committee, said during his first hearing on tax reform that he intends to work toward the elimination of a system that creates “congressionally blessed” businesses and corporations.
The tax code, he said, is fully of a “dizzying array of credits, deductions, exclusions and exemptions” that often go to businesses who hire the best lobbyists to carve them out.
President Obama’s deficit commission estimated that the government loses $1.1 trillion a year in tax revenue due to such loopholes, and proposed eliminating most or all of them, in conjunction with lowering the corporate tax rate to 26 percent from its current level of 35 percent.
There are also many tax deductions and loopholes for individuals, such as the child tax credit and the home mortgage deduction. The deficit commission recommended getting rid of most or all of those as well, in conjunction with drastically lowering income tax rates to as low as 8 percent, 14 percent and 23 percent, from their current levels, which range from 10 percent to 35 percent.
Camp did not explicitly endorse this idea, but spoke of it in positive terms.
“The tax code is too complex, too costly, and takes too much time to comply with. All this adds more burdens on families and employers – making it more difficult to create jobs in this country,” Camp said. “I am under no illusion that the task before us will be easy. To really reform the tax code in a way that lowers the tax rate, broadens the base, and promotes the competitiveness of American companies, we will need to make some tough choices.”
Last week, a top U.S. Chamber of Commerce official voiced support for comprehensive tax reform that eliminated loopholes for businesses as well, even though he acknowledged that many companies don’t want their specific provisions touched.
“Many of our members have their own specific tax accoutrements that they love and want to hang on to. And whereas they all agree that we’ve got to do something — ‘just don’t do anything that affects me,'” said Thomas Bell, the Chamber’s chairman.
“This is the first time that the Chamber is taking the position as an organization, and our members are generally receptive of: ‘OK, we get it. We’ve got to look at the longer term. We have to look at a significant restructuring of how we derive the revenues that we derive, and we’ve got to figure out how to get our spending down below 20 percent, because I think it’s been demonstrated that’s about all you’re going to get out of tax revenues is 20 percent of GDP,” Bell said.
Jon Ward contributed to the reporting for this story.