Thomas Donlan‘s latest editorial commentary in Barron’s explains why he believes congressional Republicans should move forward with tax reform proposals.
On the last day of the 113th Congress, the House Ways and Means Committee chairman introduced “H.R.1,” a designation hoarded for two years, reserved for what the Republican majority said would be the most important bill of 2013 and 2014. It turned out, however, that tax reform was so important that the House did not dare consider it.
Chairman Dave Camp, a Michigan Republican who shepherded the bill by keeping it penned up, has now retired, so all the fingerprints on H.R.1 are those of a chairman conveniently gone and soon to be forgotten. Republicans can say anything they like about tax reform for the next two years.
But they shouldn’t spend two more years in fantasyland with no specific tax-reform program. Holding majorities in both houses for the 114th Congress, they ought to quickly produce an overhaul of the tax code, using Camp’s bill as a starting point.
Though it was far from perfect, the dead bill cut existing marginal rates on the personal income tax from seven to three — 10%, 25%, and 35% — and it reduced the top corporate rate to 25%. It replaced some of the more egregious special deductions, exemptions, and credits, as well as the alternative minimum tax. It expanded the standard deduction so that about 95% of taxpayers would not need to fill out the long forms to itemize their tax returns. It nearly eliminated the U.S. claim to tax income earned overseas.
Camp’s committee held 30-some hearings; incoming Chairman Paul Ryan (R., Wis.) can get down to business immediately.