The House’s top tax writer says that a hike in the capital gains and dividends rate will not be part of his long-awaited overhaul of the tax code.
“A cap gains tax hike is not going to happen,” House Ways and Means Chairman Dave Camp (R-Mich) told The Wall Street Journal. “We think taxes on capital are already too high, as they were under Reagan.”
The Michigan Republican has laid out broad goals for a reformed tax code – reducing the top corporate and individual rates to 25 percent, for instance.
But he has yet to really outline which tax breaks would have to be scrapped or modified to offset such a rate cut, and taking capital gains and dividends off the table would make that challenge even more difficult.
Camp also faces a number of other challenges in getting tax reform across the finish line.
Republicans and Democrats remain divided on whether tax reform should raise more government revenues, and there are questions about how much appetite leaders in both chambers have in pursuing tax reform. Camp’s counterpart in the Senate, Finance Chairman Max Baucus (D-Mont.), has also made tax reform a top priority.
The fiscal-cliff deal signed early this year increased the capital gains and dividend rates from 15 percent to 20 percent, with ObamaCare surtaxes adding another 3.8 percentage points. The top individual rate is currently 39.6 percent, while the corporate rate tops out at 35 percent.