Camp to release small business tax draft on Wednesday

Rep. Dave Camp (R-Mich.), the House’s top tax writer, will release a draft proposing changes to tax laws for small businesses on Wednesday, as part of his broader efforts to comprehensively overhaul the tax code. 

Many small businesses pay taxes as individuals, a major reason that Camp and other Republicans have long said that the tax code needs to be rewritten for both individuals and corporations. 

Camp, the chairman of the Ways and Means Committee, has vowed to pass a reform plan out of his panel this year, and says he is still shooting to bring the top rate for both individuals and corporations down to 25 percent. 

House GOP leaders have reserved H.R. 1, prime legislative real estate, for the tax reform package that emerges from Camp’s panel. 

Camp’s small business draft comes after proposals on offshore corporate profits and on complex financial instruments like derivatives. Figures from across the political spectrum praised Camp’s draft on derivatives, which was released in January. 

Sen. Max Baucus (D-Mont.), the Finance Committee chairman, is also pursuing comprehensive tax reform, and Treasury Secretary Jack Lew has also expressed an interest in the issue. 

But Democrats and Republicans remain divided over whether the government should collect any more revenue after the fiscal cliff deal. Individuals now pay a top rate of 39.6 percent in the wake of the fiscal cliff deal, while the corporate rate tops out at 35 percent. 

President Obama had also previously shown a greater interest in reforming the corporate tax code. Small business advocates have feared that, in a corporate-only reform, tax breaks their companies use would get tossed aside without the corresponding rate reduction.

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