Dave Camp: Mitt Romney has released a bold, aggressive plan on tax reform. The President, well, he finally released a “framework” for partial reform.
Chairman Dave Camp (R-MI) Remarks: Federal Policy Group’s 2012 Tax, Budget, and Legislative Policy Seminar Thursday, May 17, 2012 (Remarks as prepared)
As I prepared for today’s remarks, I looked back on the comments I made last year when I spoke to you. Whether it was looming tax hikes that still hang over this weak economy, stalled trade deals that have since been signed into law, or the debt limit crisis, which the Budget Control Act pushed off until at least the end of this year or early 2013, last year dealt us a lot of challenges.
Some we dealt with better than others. For example, the payroll tax conference committee, despite the December theatrics, was resolved ahead of schedule – the deal was announced two weeks prior to the February 29 deadline. Others, like the Supercommittee, well…let’s not go back there.
The bottom line is this: America is still in crisis. Unemployment remains high, while participation in the workforce is at a 30-year low. While the Budget Control Act took the first step towards reducing out-of-control spending in Washington, we are but a few short months from yet again hitting our nation’s debt limit. Worse yet, the small businesses we’re counting on to move our economy forward and virtually every worker in America is facing the prospect of higher taxes starting January 1.
Of the challenges that still remain, there is one simple unifying thread that is woven through each of them – jobs.
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 you know, every Republican Member of the Ways and Means Committee signed a letter to the Budget Committee detailing these policies and the House has adopted this approach as part of this year’s budget resolution. Not only will we cut rates, we:
• 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• Move from an outdated worldwide system of taxation to a more competitive territorial system.
Moving to a territorial system, along with a lower corporate rate, is critical to ensuring that we are an attractive destination for other countries looking for new places to do business. It is equally important that we – once-and-for-all – have a tax system that encourages our companies doing business abroad to bring profits back home instead of leaving them stranded around the globe.
American companies should be free to invest their global earnings in their American operations – not once, not once every few years, but each and every year. It is time America’s tax code put the American economy first.
That is the cornerstone of the territorial draft the Committee released last fall. I know many of you have been actively engaged in helping us refine that proposal, and I thank you for your advice and practical knowledge of how the rules Washington sets can impact business and workers in the real world.
So, what do we have to show for all of this? Where do we really stand on tax reform? Well, two-years ago, when I was the Ranking Member of the Committee, no one was seriously talking about tax reform. Today, House Republicans have made it a centerpiece of our platform. Mitt Romney has released a bold, aggressive plan. The President, well, he finally released a “framework” for partial reform.
Clearly, progress has been made. This isn’t just some Dusty Springfield song, and we aren’t just sitting around “wishing and hoping and thinking and praying,” that tax reform will get done.
Over the last month, I and Pat Tiberi, Chairman of the Select Revenue Measures Subcommittee, in coordination with Kevin McCarthy and Peter Roskam – our Whip Team – hosted tax planning sessions with House Republicans. As a result of those meetings, I can firmly say our goal is: One, block massive, job-killing tax increases; and, two, enact – not just pass – comprehensive tax reform.
And, there is strong support to use the expiration of the 2010 compromise as leverage to force action in 2013 on comprehensive tax reform. How? Simple: in addition to extending current low-tax policies originally enacted in 2001 and 2003, we should enact fast track procedures to compel comprehensive tax reform next year. There are 34 examples of fast track already in law. The one most of us recognize is TPA – Trade Promotion Authority.
This is an idea House Republicans support, the Speaker endorsed it earlier this week, and I urge the Senate and the President to get behind it as well. Doing so would send a clear, strong message to the markets, to employers and families that Washington is serious about reforming our tax code and putting us on a path to sustained economic growth.
Now, as Chairman, it should come as no secret to any of you that I have tended to run things differently than my predecessors – both Republican and Democrat. I am not fond of putting out a bill and expecting that the support will come. Nor do I prefer the “take it or leave it” approach to legislating that has become too common over the years. It simply does not yield the results and the growth that this country so deeply needs.
Instead, I intend, as I have said since the first hearing of this Congress, to run the Committee in a way that not only allows stakeholders at all levels the opportunity to share their thoughts – but makes clear that they are expected to do so as well.
Simply put, I intend to continue taking an open approach to tax reform, because I believe Congress wants and needs to hear from a variety of voices. We need to hear from families who have struggled too long under a maze of complexity that leaves them unable to understand how to make sense of a tax code that is ten times the size of the Bible – with none of the Good News.
We want to hear from small businesses who for too long have been living in fear because they are worried they will be used as the next “pay for” on something like a student loan bill.
And, we need to understand how our larger corporate businesses will be hurt when their long-term investment and planning decisions are waylaid because they are hit by a new tax or left in a lurch because they aren’t the politically-favored flavor of the week over at the White House.
In other words, we need you – all of you.
It has been said that when it comes to the legislative process in Washington that, “If you are not at the table, then you are on the menu.” Well, let me be clear – you are all at the table. We want you there, and we need you there. And if you, your industry, your association, or your advocacy group thinks otherwise, then I encourage you to look again. There is a place card with your name on it, so pull up a chair. I strongly urge you not to turn away from this opportunity.
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.
Given that I am currently serving as a conferee on the Highway bill, I hope that you will pardon the pun when I say that the pathway to comprehensive tax reform is not an express lane.
Instead, there are a few stops we need to make on the way.
So, before I close, please allow me to talk about one of those stops – tax extenders. In 2010, and mostly as a result of negotiations behind closed doors, 73 provisions expired. I was there, and I didn’t enjoy it.
Washington should not operate in the dark. Congress is a public body and must conduct itself in public. That is why I have tasked Chairman Tiberi with an open review of the tax extenders, something that neither Ways and Means nor Senate Finance has done since 2005.
If extenders are beneficial and are helping the economy, then they should be seriously considered. On the other hand, if an extender has outlived its value, and if it is not producing the economic benefits it once was, then we need to determine whether there is merit in continuing that provision.
Those are not easy choices to make, and matters are only further complicated by the fact that we are trying to bridge to tax reform and we are still dealing with the combination of a weakened economy and historic levels of debt and deficits. That said, Washington must make these choices – it is what the American people sent us here to do.
I know this may make some people nervous. Don’t be; no decisions have been made. And, I know there are rumors that Chairman Tiberi and the Select Revenue Subcommittee will be doing more work in this area. Let me put that rumor to rest – they will be. Before any decisions are reached there will be another hearing, and I expect that will happen early in June.
Yes, these are big tasks and big goals, but I’ve learned in life to set the bar high. Frankly, setting the bar low only guarantees you will trip over it.
So, while overhauling our outdated tax code is an ambitious goal, it is also necessary. If the United States is to be a beacon for attracting new investment, then we must take steps that provide an opportunity for all job creators – small, medium, and large – to be a part of that economic renaissance. And that begins with all of us working together.
I thank you for providing me this opportunity to speak with you today, and I look forward to our continued work together.
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Contact: Michelle Dimarob, or Sarah Swinehart (202) 226-4774 1101 Longworth HOB, Washington, D.C. 20515 Phone (202) 225-3625 Fax (202) 225-2610
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