taxes

Morning Action: Tax Reform Proposal, Imperfect but A Step Forward

TAX REFORM.  Rep. Dave Camp (R-MI), chairman of the House Ways and Means Committee, unveiled his tax reform plan Wednesday (sub. req’d):

Ways and Means Chairman Dave Camp released an ambitious plan to rewrite federal taxation by reaching across nearly every piece of the tax code on Wednesday, defiantly pushing a plan into a Congress largely uninterested in addressing the tough political choices an overhaul would bring.

The Michigan Republican billed the plan, which would scale back an array of familiar and popular deductions for individuals and businesses, as one that clears out “special interest handouts.”

Heritage Action CEO Mike Needham said:

“This tax reform proposal is an important step in launching a debate on how to revive the American economy after years of mismanagement. Chairman Camp framed the fight perfectly in his memo to the Committee: ‘Many in Washington are scared by the prospects of tax reform; they don’t want to look special interests in the eye and say the game is up… Well, it is. We simply cannot afford the business-as-usual mentality that keeps Washington comfortable, but complacent.’ While not perfect, there is much to applaud in the Chairman’s work, and we look forward to working with the House to improve this legislation and provide the American people with the economic opportunities they deserve.”

Read more about the proposal here.

FLOOD INSURANCE.  The GOP is courting Democrats to support their flood insurance legislation designed to undo the reforms of the 2012 Biggert-Waters reform bill (sub. req’d):

House Republican leaders continue to tweak the text of a flood insurance bill that would ease premium increases for property owners in a bid to obtain the two-thirds majority necessary to pass it under suspension of the rules. Majority Leader Eric Cantor is trying to address Democrats’ concerns so that the Senate could simply clear the plan, instead of amending it. The bill, which was supposed to be taken up on the House floor today and amounted to the only substantive legislation for the week, is being attacked by conservative lawmakers and such outside groups as the Club for Growth on the grounds it would have taxpayers front high costs to subsidize individuals’ insurance policies.

Read our key vote against the bill, where we note, “Taxpayers should not be forced to continue subsidizing high-risk development of flood-prone areas.”

TRANSPORTATION.  The Heritage Foundation’s Emily Goff explains how President Obama’s ‘unified’ transportation plan would hurt commuters and businesses:

If you set aside $50,000 dollars for your child’s college education, would you want to be forced to give a large portion of that money to pay for the college costs of someone else’s child? If you bought a new car, would you want to have to let your roommate—who didn’t buy one—use it every other day at your expense? Of course not.

Yet these scenarios are similar to details of the proposal unveiled today by President Obama for the next federal highway bill: take per-gallon federal gas tax money paid by the motorists, truckers, and bus operators that use the nation’s highway and bridges, and spend it on other modes of transportation—such as passenger rail and urban subways and bus systems—which do not benefit those motorists paying the tax.

Adopting a “unified” or mode-neutral highway bill is dangerous. It would punish the motorists paying the federal gas tax that largely funds the Highway Trust Fund (HTF) that pay for the Federal Highway Program. It would also open the door even further for special interests to lobby Congress and Washington bureaucrats to spend gas tax money on the modes of transportation and non-transportation activities they want—at the expense of highways and bridge maintenance and construction that motorists expect to be paid for with gas tax money.

 

 

 

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