Republicans cast tax-reform bill as job-creation bill

House Republicans on Thursday described their broad tax-reform bill as one that would allow people to take all the the money and time they now spend on complying with the tax code and direct it toward job creation.

"The tax code we have today is not working," House Rules Committee Chairman David Dreier (R-Calif.) said during debate. "It's unfair, and it's byzantine in its complexity, and we all know too that the tax code that we have ... is clearly a drain on our economy."

Dreier said that since 2001, there have been 4,500 changes to the tax code, which is about one change per day.

"The resulting complexity leads to nearly nine out of 10 families to seek assistance in filing their federal income taxes," he said. He added that 71 percent of small businesses pay for help with their taxes, and that it costs citizens 6 billion hours and $160 billion a year to comply with the current code.

"I've talked to tax attorneys and accountants ... and they acknowledge that these wasted resources are a drain on economic growth and on our shared bipartisan quest for job creation," he said.

Ways and Means Committee Chairman Dave Camp (R-Mich.) agreed with Dreier, and said the combination of simplifying the code and capping the government's access to tax funds would help create jobs in the struggling U.S. economy.

"Tax reform is not about making the government bigger, it is about creating jobs," Camp said. "That is why this bill says federal tax revenues should remain within historic norms of 18-19 percent of gross domestic product.

"Independent economists have noted that, when paired with appropriate government spending cuts, comprehensive tax reform that includes these policies could lead to the creation of one million American jobs in the first year alone."

The GOP tax reform bill, H.R. 6169, would set up a timetable for having an up-or-down vote on legislation next year that simplifies the code and limits individual and corporate tax rates to a maximum of 25 percent. It would also repeal the Alternative Minimum Tax (AMT), and eliminate special-interest tax breaks in an effort to broaden the tax base.

Democrats warned during debate that the bill would lead to the elimination of many tax breaks that middle-class Americans enjoy, like the mortgage interest deduction.

"These are not loopholes. These are policies that in many cases help make the middle class of this country," Levin said. "They are basically middle-class provisions, and now they are on the chopping block under this Republican plan."

Republicans did not address that specific issue, but said their goal is to simply the code and allow the resulting job growth to lead to additional government revenues. Dreier in particular challenged the Democratic argument that Republicans are opposed to new revenue, and said they want new revenues this way rather than by raising marginal rates.

Levin and other Democrats cited a Joint Economic Committee analysis that said under the GOP plan, millionaires could receive tax cuts as high as $330,000, while a middle-class family would pay $4,500 more. But Camp dismissed that analysis as one that examines a "made-up" plan, not the one Republicans were pursuing, and said the GOP would only be pushing for a plan that lowers rates for the middle class.

Democrats also said the bill would allow the Ways and Means Committee chairman to write the entire tax reform bill by himself, which they said goes against the GOP's stated goal of opening up the process of tax reform to the full House. But Democrats also accused Republicans of staging a vote on a bill that will not go anywhere for political purposes.

"Procedurally and substantively, the bill is a disaster," Rep. Barney Frank (D-Mass.) said. "That's the bad news. The good news is that no one thinks it is a serious legislative efforts. This is one more bumper sticker from the gang that could not legislate."

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