Retiring Rep. Camp says tax reform still possible

David Shepardson
Detroit News Washington Bureau

Washington — The retiring chairman of the House Ways and Means Committee who spent much of the last three years working on a massive reform of the U.S. tax code says he thinks the next Congress has an opportunity to finish the job.

Rep. Dave Camp, R-Midland, who is leaving Congress at the end of this year, held 35 hearings working on a proposal to dramatically overhaul the tax code — proposing to eliminate deductions and reduce marginal tax rates. It would have boosted deductions for children, simplified filing taxes to reduce the $168 billion Americans spend preparing taxes and used $126 billion of the proceeds during the next decade to pay for fixing the nation's crumbling roads and bridges.

"There's no doubt it's tough, and there's no doubt there would be trade-offs made in order to simplify the code and get lower rates," Camp told The Detroit News in an interview. "We really did get people to look at how are you doing under" the current rates and how would they improve in a revised code. "A new Congress may make different trade-offs ... but it is a debate we need to have as a country."

Retiring Sen. Carl Levin, D-Detroit, seemed to agree. Levin told The Detroit News on Friday he thinks there is a good chance Congress will take up tax reform in 2015.

Sen. Debbie Stabenow, D-Lansing, a member of the Finance Committee, said in a separate Detroit News interview last week that she supports tax reform but only if it is done in the right way, saying the priority must be "closing all those loopholes that are shipping jobs overseas."

At a year-end press conference Friday, President Barack Obama pledged to work with Congress on tax reform. He laid out broad outlines of a corporate tax reform plan in 2012 to cut rates to 28 percent. In 2013 he proposed another broad corporate tax plan calling on Congress to use additional revenue from corporate tax reform for highway and infrastructure projects.

"The tax area is one area where we can get things done. And I think in the coming weeks leading up to the State of Union, there will be some conversations at the staff levels about what principles each side are looking at," Obama said Friday.

"I'd like to see more simplicity in the system. I'd like to see more fairness in the system. With respect to the corporate tax reform issue, we know that there are companies that are paying the full freight — 35 percent — higher than just about any other company on Earth, if you're paying 35 percent, and then there are other companies that are paying zero because they've got better accountants or lawyers. That's not fair."

He added that "there are companies that are parking money outside the country because of tax avoidance. We think that it's important that everybody pays something if, in fact, they are effectively headquartered in the United States." But Obama said, "The devil is in the details. And I'll be interested in seeing what they want to move forward. I'm going to make sure that we put forward some pretty specific proposals building on what we've already put forward."

Incoming Senate Finance Committee Chairman Orrin Hatch, R-Utah, is interested in tax reform, as is Camp's successor as Ways and Means Committee chairman, Rep. Paul Ryan, R-Wis.

But it won't be easy. There is short period before Washington turns its attention to another presidential and congressional election in 2016. Camp says the Obama administration must craft a specific proposal if it hopes to reach a deal.

The U.S. tax code hasn't had a major overhaul since 1986, when President Ronald Reagan and Congress slimmed down to two individual income tax rates — 15 percent and 28 percent. The current code has seven brackets ranging from 10 percent to 39.6 percent.

Pushing policies

Camp, who has worked with Democrats on the issue and traveled the country to push it, said in February his tax reform proposal would create 1.8 million jobs over 10 years and would add $3.4 trillion to the nation's economic output during the same period, according to estimates based on a Joint Committee on Taxation analysis.

"These policies would have a positive effect throughout the economy," Camp said. "It's so important for the future of our country."

For too long the country has had slow growth, flat wages, still too many people out of work and far too many individuals dropping out of the workforce after getting discouraged looking for work, he said.

That's why the president needs to engage Congress on tax reform, Camp said.

"Where's the administration on the details?" he said. "Where are they on the hard work that needs to be done to really move this whole debate forward?"

Having Obama give a speech is not the same as engaging Congress on the issue, Camp said.

"That's just the beginning," he said.

The United States has one of the world's highest statutory corporate tax rates, but many companies pay far less than the tax code rates by taking advantage of loopholes. Critics argues the high corporate tax rate gives some companies an incentive to merge with a foreign company to avoid U.S. taxes, while others blame firms for tax avoidance.

Countries around the world are reforming their tax codes to persuade companies to locate jobs.

"Even Mexico has reformed its tax code and did it in a pretty dramatic way," Camp said. "We absolutely can do that here."

Camp says the October 2013 government shutdown and the decision of Sen. Max Baucus, D-Mont., to become U.S. ambassador to Japan hindered the chance to get major tax reform approved.

"Both of those things dramatically changed the trajectory of what I was tried to do," he said.

Camp: No regrets

Camp said he had no regrets on declining a chance to run for U.S. Senate in a year when Republicans won most of the seats and will take control of the upper chamber in January. Many people prodded him to run for Levin's seat.

"I had an obligation" to focus on his work as chairman, Camp said, and he was committed to releasing his proposed tax reform measure.

Camp decided to retire after 24 years in Congress and says he is looking forward to trying something new.

He said he has no plans to run for another office. Camp, who has high-school-age children, said he intends to live in Michigan but may spend some time in Washington working on issues important to him like tax reform in the form of "strategic consulting," not lobbying.

Camp was born and raised in Midland, the son of a car dealer. He campaigned for his childhood friend Bill Schuette, now Michigan's attorney general, and became his chief of staff when Schuette was elected to Congress in 1984. Camp was later elected a state legislator for a term and then won Schuette's mid-Michigan open seat in 1990.

Camp recounted in a C-SPAN interview that aired Friday that he called former President Gerald R. Ford out of the blue in a "Hail Mary pass" to ask him to support his bid to get on the Ways and Means Committee. He credited Ford's call to a House Republican with helping him getting the seat.

Camp says he is most proud of his work on welfare reform in the 1990s and a series of adoption and foster care bills signed into law by Presidents George W. Bush and Obama. He recounted that a Michigan judge told him recently that the laws are helping to "promote adoption and moving kids faster into a more permanent situation."

He never received less than 61 percent of the vote in his mid-Michigan congressional district, even though Democratic presidents often won his district. He also survived a battle with cancer two years ago.

"I felt like I've done what I wanted to do," Camp said. "I've seen people stay too long. ... It's time."

You can watch Camp's C-SPAN interview at: