GOP tax writer: We're getting ready for tax reform

A key congressional tax writer said Tuesday that he thinks an overhaul of the nation’s tax code could happen sooner rather than later, but didn’t seem ready to make a wager on when it might occur. 

“It’s like any other thing in Congress. You’ve got to try and be ready,” Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, told a collection of corporate financial officers at an event sponsored by The Wall Street Journal. “And so what we’re doing is trying to do the work so we’re ready if factors come together. And I think they might.”

Camp, whose panel has held a string of tax reform hearings this year, named the sluggish economy as one reason policymakers might coalesce behind tax reform, signaling that he also thought President Obama might not want to for re-election while there was uncertainty about the Bush tax cuts that are set to expire at the end of 2012. The Michigan Republican also said he would prefer to look at the potentially thorny issue of repatriation within the context of broader reform.

At the Tuesday event, Camp also expressed confidence that three stalled trade agreements would pass Congress soon. 

Camp’s appearance came just hours after Treasury Secretary Timothy Geithner, another key player in tax reform, sat before the same event. 

Both top officials reiterated their commitment to revamping the nation’s tax code on Tuesday, but their appearances both showed some of the roadblocks that will need to be cleared for tax reform to be successful.

Camp, for instance, stressed again that he wants to see the individual and corporate tax codes overhauled at the same time, since many companies pay taxes as individuals. Geithner said earlier in the day that he thought the corporate code could go first.  

But like Geithner, Camp did say that he thought tax reform would need to be done outside of the current debt-ceiling talks led by Vice President Joe Biden. 

Republicans have generally favored a broad, revenue-neutral reform of the tax code. Geithner and other administration officials have said that they’d like the corporate code to be revamped without adding or subtracting from the deficit, but also that the Bush-era marginal rate for high-income individual taxpayers should rise. 

As for repatriation, Camp said he wants to encourage U.S. multinationals to bring home profits that are currently offshore. But he said, long-term, he would prefer to move to a territorial tax system, where corporations would generally not be taxed on profits made abroad. 

“We did repatriation a few years ago,” Camp said, referring to a corporate tax holiday enacted in 2004. “And here we are, back again with the same problem.”

The Michigan Republican also agreed with Geithner’s assertion that the trade pacts with South Korea, Colombia and Panama would clear Congress this year.

“We’re getting close. I expect that we’ll get there,” Camp said.

But the chairman also expressed some skepticism about the cost of the Trade Adjustment Assistance program, which helps workers displaced by trade. The Obama administration has said it wants to see an expanded version of the program renewed before it will send up the pending trade deals. 

Camp said that some workers get 150 weeks of assistance through TAA, while more general unemployment compensation lasts for 99 weeks. He added that Washington should probably take a broader look at jobless benefits and how they are distributed.