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US House tax writer vows tax reforms

Nov 16 2012, 18:01 IST
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Summary'We intend to move a comprehensive tax reform bill in 2013'

The U.S. House of Representatives' top Republican tax writer on Thursday pledged to tackle a full-scale overhaul of the tax code in 2013, but offered few specifics on how to get it done.

Republican Dave Camp said in the text of a dinner speech that the House Ways and Means Committee, which he chairs, will write, act on and pass comprehensive tax reform legislation in 2013.

He added, Let me repeat that: we intend to move a comprehensive tax reform bill in 2013 - no matter what.

The U.S. tax code has not been thoroughly overhauled since 1986. Since then, it has become riddled with loopholes even as the federal budget has slid deeply into deficit.

Bipartisan political support for tax reform has been building in response to the deficit and growing criticism that the tax code is not only inadequate, but to some, unfair.

One thing that is virtually undisputed though is that tax reform always takes leadership from the Oval office, Camp said.

Nearly everyone who worked on the '86 Act has said that it required the leadership of the president of the United States. President Ronald Reagan made tax reform a cause.

Camp challenged U.S. President Barack Obama , re-elected to a second four-year term last week, to lead on tax reform, while hewing closely to Republican opposition to the De mocratic pre sident's call for raising tax rates on wealthy Americans.

The president has a choice to make before the end of the year. Does he simply want to stand for higher tax rates on top of a broken code, or will he s upport comprehensive tax reform that strengthens our economy? Camp said.

Obama has urged major tax code changes, as well, and has offered a plan to end a number of corporate tax breaks and lower the corporate tax rate.

Camp also has a corporate tax plan . But the two political parties r emain deeply divided on the urgent question of what to do about individual income tax rates, which will rise sharply at the end of the year unless Congress reaches an agreement on dealing with the fiscal cliff.

If mishandled, th e tangle of tax increases and deep federal spending cuts threatens to push the economy back into recession. A key component is what to do about income tax cuts pushed through a decade ago under Republican President George W. Bush.

Obama wants these low tax rates to be extended for 98 percent of Americans, but allowed to expire for the wealthiest 2 percent. Republicans want to extend the low rates for all.

Both sides agree more government revenue is needed to lower the budget deficit, but Republican leaders have said their party will not consider tax rate increases to accomplish that. Instead, they favor tax reform and tax cuts, saying these steps would spur the economy and boost government tax revenues.

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