July 31, 2014

‘Fast-track’ Plan for Tax Reform

  • The nation's fiscal future depends on the balance between the spending in the federal budget and the revenues flowing into the treasury. Tax policy...

House Republican leaders are suggesting the use of “fast-track” legislative procedures to revamp and simplify the federal tax code next year. In remarks last week, however, House Ways and Means Committee Chairman Dave Camp tied the proposed overhaul to an extension of all the Bush-era tax cuts that would sharply increase projected deficits in the years ahead.

The Concord Coalition and many other bipartisan groups have advocated comprehensive tax reform as part of larger deficit-reduction plans. The proposed changes would eliminate many “tax expenditures,” which are essentially government spending programs embedded in the tax code – often with little public scrutiny.

Reducing these tax expenditures would enable the government to reduce future deficits, lower tax rates or both. Many Republicans and Democrats support reducing tax expenditures although Republicans generally oppose using any of the resulting revenue to reduce deficits.
The two parties also differ over extending the Bush-era tax cuts to the country’s wealthiest households, posing a difficulty for the scenario outlined by Camp last week.

In prepared remarks, he said there was strong Republican support to use the scheduled expiration of the Bush tax cuts this year “as leverage to force action in 2013 on comprehensive tax reform.  How?  Simple: In addition to extending current low-tax policies originally enacted in 2001 and 2003, we should enact fast-track procedures to compel comprehensive tax reform next year.”

House Speaker John Boehner supports the fast-track plan, which Camp is still developing. There are 34 examples of fast-track procedures in the law,  the chairman said. That includes trade agreements that Congress has 90 days to accept or reject without amendments.