House Ways and Means Committee Chairman Dave Camp, (R-Mich.) joined the tax reform/extenders debate today, pledging to link the pending expiration of the 2001 and 2003 Bush-era tax cuts as leverage to force action on comprehensive tax reform in 2013. He followed an announcement Tuesday by Speaker John Boehner (R-Ohio), who laid out the need for spending cuts to accompany any increase in the debt limit. It is believed that Congress will once again need to increase the debt limit in late 2012 or early 2013. These two speeches have laid out major issues that many in congress had hoped to push off until after the election.
The announced plans include pre-election votes on the Bush tax cuts this summer and an initiation of discussions over potential budget cuts. Chairman Camp also reiterated his position that the extension of the current law tax cuts does not need to be offset with spending cuts. The tax reform debate will also include the consideration of more than 30 processes that might expedite the consideration of comprehensive tax reform.
As background, every Republican member of the Ways and Means Committee signed a letter to the Budget Committee detailing important elements of comprehensive tax reforms and the House adopted this approach as part of this year’s budget resolution. Important elements of the reforms include the following:
- Collapse the six rates on the individual side to two rates of 10 and 25 percent
- Reduce the corporate rate to 25 percent
- Eliminate the Alternative Minimum Tax
- Move from an outdated worldwide system of taxation to a more competitive territorial system.