Print Page   |   Report Abuse
News & Press: International News

US: Republican Camp Raises Prospect Of Missing Tax-Plan Date

14 November 2013   (0 Comments)
Posted by: Authors: Richard Rubin & Roxana Tiron
Share |

Authors: Richard Rubin & Roxana Tiron (Bloomberg)

Representative Dave Camp, the top Republican tax writer in Congress, heads into a meeting with party leaders today with almost three years of his work on tax policy hanging in the balance.

Camp, chairman of the House Ways and Means Committee, wants to push legislation through his panel to lower individual and corporate tax rates and curtail tax breaks in the most significant change to the Internal Revenue Code since 1986.

The details of his plan, which Camp started developing when he became the panel chairman in 2011, are "very close” to being done, said Representative Charles Boustany, a Louisiana Republican on the committee.

Politics are another matter. Republicans are wary of siphoning attention from the flawed start of President Barack Obama’s 2010 health-care law and toward a bill that would impose higher burdens on some taxpayers while benefiting others.

"All of those issues of timing will be discussed with the chairman and leadership,” Representative Kevin Brady of Texas, a senior Ways and Means panel member, told reporters yesterday at the Capitol after a meeting of fellow committee Republicans.

Camp, 60, said for the first time yesterday that he may not meet his self-imposed deadline of releasing a bill and moving it through the committee this year.

The 16-day partial government shutdown last month set back the committee’s work by three weeks, he said. House members are scheduled to be in session for 14 more days this year, counting today, before they plan to leave Washington on Dec. 13.

‘Move Forward’

"I very much have wanted to stick to that, certainly to have the bill ready and to be able to move forward this year if we can,” Camp said. "Things do change around here and I think you have to look at the timing and circumstances you’re in.”

Camp will meet today with the House’s top Republican leaders, including Speaker John Boehner of Ohio, Majority Leader Eric Cantor of Virginia and Majority Whip Kevin McCarthy of California.

The leaders can’t stop Camp from releasing a bill. They may, though, urge him to wait, say they would withhold support if he moves ahead or ask other party members to tell Camp that they oppose his plan.

Camp, of Michigan, said he has thought about whether the Ways and Means Committee could do something short of moving a complete bill this year to make some progress. He said that idea isn’t being actively considered.

Party Goal

The tax bill is a party priority that would advance a goal Republicans have embraced in their budget each year since winning the House majority in the 2010 elections. What they haven’t done is add all of the details, showing which taxpayers would win and who would lose.

A major tax bill would affect multiple industries and markets, including states that issue tax-exempt municipal bonds, companies such as retailer Macy’s Inc. (M) that advocate lower corporate tax rates, and individuals who receive tax-free health insurance from their employers.

Republican leaders are concerned about the lack of a path to a tax law before this Congress concludes at the end of 2014, given their opposition to raising taxes and Democrats’ insistence that major tax-code changes be accompanied by revenue increases, said three Republican aides who spoke on condition of anonymity to discuss party strategy.

Camp has said that his plan wouldn’t raise or lower federal revenue and that it wouldn’t shift the tax burden from higher-income households to others.

‘Revenue Question’

"The revenue question hasn’t gone away,” said Representative Richard Neal, a Massachusetts Democrat and senior Ways and Means member.

Still, Neal said, there are plausible paths for Congress to succeed before the end of 2014.

"Nobody likes the current system,” he said. "The argument’s over what the new one should look like.”

Revenue has become part of lawmakers’ debate over tax-and-spending issues with the U.S. budget deficit in mind. The U.S. Treasury Department yesterday released a report saying the budget deficit narrowed last month, even as the federal government was closed down for part of it. Spending exceeded receipts by $91.6 billion last month, compared with a $120 billion shortfall in October 2012.

Stronger hiring has helped reduce the country’s budget deficit as a share of gross domestic product by more than half in the past four years, narrowing it from a record $1.42 trillion in 2009.

Deficit Forecast

The Treasury last month said the shortfall in the 12 months ending Sept. 30 was 4.1 percent of GDP, and the Congressional Budget Office has projected it will decline to 3.3 percent of the economy this fiscal year and 2.1 percent in 2015.

On the tax front, Camp has held details of his plan closely, particularly those on politically charged issues such as the mortgage interest deduction, capital gains rates and the tax exemption for credit unions.

He has been holding a series of closed-door meetings with his committee’s Republican members over the past few months as they try to draft a proposal. The goal is to lower the top individual rate to 25 percent from 39.6 percent and the top corporate rate to 25 percent from 35 percent.

Camp has released discussion drafts of changes to the taxation of international income, derivatives and small businesses.

Camp has been working with Senate Finance Committee Chairman Max Baucus, a Montana Democrat. They have a joint Twitter handle on their goal of revising the tax code and went on a multi-city tour earlier this year.

Baucus will hold a closed-door meeting today with committee members from both parties as he prepares to release up to three discussion drafts of his own.

Probable subjects for those drafts include the taxation of U.S. companies’ foreign income, tax administration and capital cost recovery, said Senator Rob Portman, an Ohio Republican on the Finance panel.

This article first appeared in bloomberg.com.


WHY REGISTER WITH SAIT?

Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

MINIMUM REQUIREMENTS TO REGISTER

The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

Membership Management Software Powered by YourMembership  ::  Legal