The House’s top tax writer panned the tax proposals in President Obama’s new budget, despite some overlap between his new reform draft and the White House’s ideas.
“Unfortunately, the President’s budget adds more complexity to the tax code and increases taxes for more Washington spending,” Camp added. “That is the wrong direction.”
Congressional Republicans in general had that sort of reaction to the Obama budget, which again seeks a corporate-only tax reform and $276 billion in revenue from changes to the international tax system. Obama also seeks to pour new revenues into spending priorities like education, while Camp places more of
But at the same time, Camp and Obama do both target some of the same tax breaks for elimination, perhaps suggesting some common ground for future tax negotiations.
The Obama budget also underscores why some GOP leaders were skeptical of Camp releasing his tax draft, given the uphill climb it faces to becoming law. By laying out which tax breaks he would target, Camp could allow Democrats to say that certain revenue-raising proposals have bipartisan support.
Obama and Camp, for instance, both propose scrapping the current set-up that allows hedge fund managers to pay the lower capital gains rate for much of their earnings and a preference that allows some small business owners to avoid payroll taxes.
Camp and Obama also seek new revenues for the highway trust fund, and a a new bank tax – though Camp’s proposal would both hit fewer financial institutions, and raise more money.
Obama also brought back his proposal to cap the value of itemized deductions at 28 percent, even as the top tax rate remains at 39.6 percent. Camp’s plan, somewhat similarly, would scrap most itemized deductions once taxpayers hit by a 35 percent bracket.
Of course, the two plans also have broad differences: Obama, for instance, seeks to expand the Earned Income Tax Credit, which seeks to help the working poor. Camp scales back that credit in his plan.
Dorothy Coleman of the National Association of Manufacturers said it was also unfair to compare Camp’s more fully fleshed-out tax reform plan, and a White House budget framework.
“It’s apples and oranges,” said Coleman, whose group has long been skeptical of Obama’s tax plans, even as the White House has made the manufacturing sector a top prority. “We look at Camp’s proposal as a complete plan.”