John Hood’s recent column on tax reform should remind us that the process of cleaning up an outdated tax code isn’t simple. Bloomberg Businessweek offers a good example of the political fight over reform at the federal level.
As part of an effort to revamp the 4 million-word tax code, House Ways and Means Committee Chairman Dave Camp invited Americans to send suggestions to Congress. More than 300 companies and business groups chimed in this spring, many with the same message: An overhaul is a great idea—as long as it doesn’t affect us.
Camp, a Michigan Republican, wants to lower the corporate tax rate from 35 percent to 25 percent. To do that without reducing government revenue, Congress will have to get rid of many tax breaks. Companies are saying “they want the best of both worlds,” says Representative Kenny Marchant, a Texas Republican. “They want to keep all their deductions and have a lower rate.” …
… So far, Camp hasn’t said which breaks he’s targeting. Ways and Means member Jim McDermott, a Democrat from Washington, says lawmakers will take their time picking apart the merits of the companies’ “hyperbolic worries” because the code is so long and complex, and the implications of tinkering with it are enormous. “When you touch one place in a spider web,” McDermott says, “it all moves.”
