With all the complaints about Washington, D.C., being gridlocked because of ideological and political conflict, let us take note of one area of bipartisan unanimity: Tax reform.
At a forum hosted Wednesday by Business Roundtable, the chairman of the White House's Council of Economic Advisers, Jason Furman, and the Republican chairman of the House Committee on Ways and Means, Rep. Dave Camp (R-MI), both agreed that business tax reform was critical for improving U.S. global competitiveness. Substantial policy disagreements surfaced, to be sure, but the fundamental consensus for reform gives some hope.
Joining the BRT as sponsors of the discussion, "Tax Reform: Lessons Learned and the Path Forward," were the Alliance for Competitive Taxation (ACT), the Information Technology Industry Council, the International Franchise Association, the LIFT American Coalition and the Semiconductor Industry Association. Larry Kudlow, CNBC commentator, columnist and radio host, moderated the discussion.
Camp unveiled a comprehensive tax reform plan in February which included a major provision to lower the top corporate tax rate to 25 percent (a goal shared by Business Roundtable). On Wednesday, the congressman reiterated the value of comprehensive business reform -- including a shift to a modernized "territorial" system of taxing global earnings -- to strengthening the U.S. economy while also discouraging the kind of "inversions" that lead U.S. companies to relocate their legal incorporations to lower-tax countries. As Camp said in a statement released after the panel: "Everyone agrees that tax reform is the only solution that will both keep companies from moving their headquarters out of the United States, and encourage more businesses to grow, hire and increase wages for American workers."
Making the news for the day, Camp repeatedly challenged the Administration to release a detailed tax proposal rather than its previous budget summaries and frameworks: "I could negotiate with myself. I don’t think it would get anywhere. But I can’t really counter what I’ve done with nothing. You can’t counter a specific plan with a framework.”
Furman responded that the President "would love" to sign a tax overhaul plan, noting the Administration's long-voiced support for a lower corporate tax rate. At the same time, he defended the President's call for for measures to discourage corporate relocations that, he argued, undermine the U.S. tax base:
I think what the President would favor would be a hybrid approach. It would be one that recognizes the importance of the competitiveness of our companies, but also takes seriously the issue of base erosion. Tries to have a more neutral tax system, so that it’s not affecting your decisions and putting the thumb on the scale for investing overseas.
As for Camp's plan from earlier in the year, Furman suggested it was both too early and too detailed, giving critics ammunition to shoot it down.
ACT has a report and YouTube clips. News coverage:
- The Hill, "GOP chairman calls out Obama on tax reform"
- Wall Street Journal, Washington Wire blog, "As Democrats Fret About Inversions, Republicans Focus on Tax Overhaul"
- Bloomberg/BNA (subscription), "Too Much Detail Helped Sink Camp Tax Overhaul Plan, Obama Aide Says"
- Washington Examiner, "GOP tax writer: Treasury has a hidden tax-reform plan"
- POLITICO, "White House, GOP still far apart on inversions"
At BRT-hosted tax forum, from left, Chairman Dave Camp of the House Ways and Means Committee, Jason Furman, chairman of the Council of Economic Advisers, and moderator Larry Kudlow.
UPDATE (9 a.m. Friday): More coverage ...
- Bloomberg, "’Tax Reform’ Cry Hampers Effort to Curb Inversions" (Well, that's one take. Here's another: "Focus on Symptom of 'Inversions' Hampers Effort to Curb Inversions.")
- Wall Street Journal, Washington Wire, "Sen. Hatch: Democrats Use Inversions to Play Politics"
- Steve Benen, MSNBC, "Dave Camp's Short Memory"