Camp Says Tax-Code Overhaul Should Be Bipartisan (Transcript)
Representative Dave Camp, a Michigan Republican and chairman of the House Ways and Means Committee, said a U.S. tax-code overhaul should be bipartisan, prevent a net revenue increase and avoid shifts in the tax burden across income groups. He was interviewed on “Political Capital With Al Hunt,” airing this weekend.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the show with the chairman of the House Ways and Means Committee, Republican Congressman Dave Camp. Thank you so much for being with us, Mr. Chairman.
REPRESENTATIVE DAVE CAMP: Well, it’s great to be with you. Thanks.
HUNT: Let’s start with health care. That’s the story of the week, obviously. The House in a couple weeks is going to go and vote to repeal. That’s just a symbolic political gesture. What I want to know is, since they said this was constitutional because of the taxing power, will you try to repeal the Affordable Care Act under reconciliation next January or February?
CAMP: Well, I think we’re going to do a repeal vote in July right away.
HUNT: But that’s symbolic.
CAMP: Yeah, and I guess we’ll have to see what the make-up of the Congress is and -- and where this issue...
HUNT: If you have a majority, would you like to do it under reconciliation?
CAMP: Well, I’d like to repeal the bill. And I’d like to do it however we can, because I do think it -- this -- imposing the federal government between individuals and their doctors is still wrong. And just because something’s constitutional doesn’t make it a good law.
HUNT: A lot of complaints from Republicans, this was just what we thought it was, a tax, it’s a big tax, right? OK. Barack Obama enacted a tax to get affordable care through. Mitt Romney, Romneycare, big tax, even bigger tax, actually. Why is a Romney tax good and an Obama tax bad?
CAMP: Well, from the Constitution standpoint, many of us believe the states do have the taxing power to do this, but the federal government doesn’t. Obviously, this changed yesterday with the Supreme Court and they now said we have the taxing power to do almost everything at the federal level. But on the positive side, at least it does limit the Commerce Clause, which over the past few years has -- decades -- has been used to really drive virtually every social agenda.
HUNT: Was Governor Romney’s Romneycare wrong, too?
CAMP: Well, I think for states to be able to do that, that’s up to states. And I do think, frankly, our -- this issue, health care, would benefit from some action in the states and not all at the federal law.
HUNT: Of course, he -- he advocated a mandate at a federal law. He endorsed John Chafee’s 1994 alternative to Hillarycare. So Mitt Romney has come out before for a mandate on the federal level. Was that wrong?
CAMP: Well, that’s not what he did as governor, obviously. What he did as governor...
HUNT: A mandate at the state level.
CAMP: And at the state -- yeah, at the state level. And Massachusetts is a little different in terms of the make-up of its working population and everything compared to everywhere else in the country. But the states are all different. And they’re different regions. And we should be able to take account for that. And the problem is this one-size-fits-all federal law which raises taxes by almost $800 billion, at least that we know of so far, is going got be this tremendous burden on business, particularly small business.
And, frankly, what we found is there’s this perverse incentive. It’s going to be cheaper to pay the penalty than to actually provide health care. So many employers will be...
HUNT: I understand the Republican case. What I’m trying to get as, is Mitt Romney the guy who can make that case, having endorsed a federal mandate and having enacted a mandate with a tax increase in a state? Is he the best messenger to convey that negative message?
CAMP: Well, I think there’s a lot of people messaging against this whole federal, one-size-fits-all health care plan that really imposes the federal government between doctors and patients, and not to mention that the number of rules and regulations and bureaucracies. I think this is -- issue should involve some commonsense reforms at the federal level, clearly. We had a bill that had some, as well. But we really also need to be able to have the states continue to innovate in this area.
HUNT: Let’s move to one of your favorite topics, tax -- tax reform. You’re going to do it next year, you’ve made it quite clear. Every independent commission, Bowles-Simpson, Domenici- Rivlin, says tax reform has to raise revenues -- raise revenues to address the deficit. Will you do a tax reform that is revenue- neutral or will you do a tax reform that actually net raises revenues?
CAMP: Well, the concept is obviously to do revenue-neutral tax reform.
CAMP: And the reason to do that is so that you can get consensus to move forward. And we do need to lower rates and broaden the base, simplify our code, and make us more competitive internationally. We have the highest corporate tax rate in the world. It’s a very complex code. It’s all expiring.
HUNT: But you won’t raise any revenue from that effort?
CAMP: But we -- we can raise revenue through pro-growth policies. And that’s the real message that people are missing.
HUNT: But a lot of people think that dynamic scoring really - - I mean, it didn’t work under Reagan. I mean, is it -- I mean, are you going to come up with a bill that doesn’t net raise revenues unless you get an economic growth, which we don’t know if we’ll get or not?
CAMP: Unemployment’s been 8 percent for 40 months. A huge tax increase is going to further depress the ability of the economy to recover. But if we can get pro-growth tax policies in, we’ve got estimates that in the first year alone, it’s a million jobs.
HUNT: OK, so no net...
CAMP: So it’s a combination...
HUNT: No net, at least in a conventional sense.
CAMP: Well, there’s two things we need to do. We need pro- growth tax policy, but we need to address our debt. Our debt is more than 100 percent of our entire economy. According to Simpson- Bowles, this is depressing economic growth by about 1 percent. And that also is about a million jobs.
HUNT: Let me ask you this about the tax reform you’re going to do, because everyone says, all right, let’s go, we’ll give tax cuts that’ll help the rich a lot, but we’ll close loopholes that the wealthy enjoy. Erskine Bowles -- you served on the commission, you know he knows what he’s talking about -- says you can’t do that. He says there just isn’t enough money getting rid of tax expenditures that only affect the upper-income people. Are you willing, in order to lower rates, to increase taxes by -- by closing loopholes for middle-class taxpayers in areas like home mortgage deduction?
CAMP: Well, clearly, when you do tax reform, one of the things that you have to look at is the distributional table. And I think clearly this approach is going to have to have bipartisan support. This is not something we can do Republican-only.
Obviously, that’s what the Democrats did on health care. It didn’t work very well. That’s why we’ve had so many hearings to get input from not only Republicans and Democrats, but from small- business owners and think tanks and academic experts. So it’s very important we move this forward together.
HUNT: It’s got to be bipartisan?
CAMP: It does have to be bipartisan. But I...
HUNT: Does the tax code have to remain as progressive as it is right now?
CAMP: I think you’re going to have to be -- you’re going to have to certainly take into account progressivity. We have a very progressive tax code. As we know, half of Americans don’t pay any income taxes at all.
HUNT: I’m trying -- I’m trying to get you to say we’ll be as progressive when you finish.
CAMP: I believe it will be very close to where we are currently.
HUNT: OK. Let me ask you this. You have told people -- and others have -- what taxes you want to cut, 25 percent top rate -- but you haven’t told us anything about what preferences you’re going to close. Now, there’s going to be a big vote, November 6th. Don’t you owe it to Americans not just to tell them about the goodies, but to tell them how we get there? Be specific before the voters vote.
CAMP: Well, that’s why we’re having all of these hearings. We’re actually taking ideas on these items. It’s not just me issuing a bill and pronouncing from on top of a mountain what we’re going to do. We’re actually hearing from business-owners, employers, people who create jobs to find out, which of these provisions work?
Now, there’s 100 of them that expire every two years. There’s about 40 tax provisions that are already expired. Well, if they’re so good, why are they temporary?
HUNT: Will you lay out those specifics before November 6th?
CAMP: We don’t have a specific bill ready by November 6th, but I had laid out a draft proposal, for example, on international tax law...
HUNT: You have on international, but how about -- how about individual? Will you tell us at least some of the loopholes you’ll close before November 6th?
CAMP: Well, we know this. We know we don’t have to close all the loopholes. And what we’re doing -- and I’m still meeting with groups on all of these items.
CAMP: It’s a very complicated and longstanding process.
HUNT: I get the impression, Mr. Chairman, you’re not going to put out specifics...
CAMP: We’re not going to probably put out a bill, but we are going to vote in July on extending current law for a year. We think that’s important to do.
HUNT: Are you going to stick with your corporate tax reform proposal, despite the complaints from some? Are you open to amending it and how?
CAMP: Well, we had three options in there. And so we do have an ability to make some changes there. And that was really a draft proposal, was not meant to be...
HUNT: So that’s not locked in Congress (ph)?
CAMP: It’s not locked in.
HUNT: OK, let me ask you this. On tax reform, would you be willing, as you lower the rates dramatically, would you be willing to raise the capital gains and dividend tax rate to equalize it, as Ronald Reagan did in 1986?
CAMP: Well, we still -- the Senate and -- and the House have had the first hearings in 70 years on tax policy.
CAMP: We had one Thursday at 10 o’clock, but we ended up postponing it for obvious reasons of the court decision...
HUNT: Right. Right.
CAMP: ... exactly on capital gains. So we’re not going to -- I’m not going to make any pronouncements on that until we get through our hearing process on that. But clearly...
HUNT: But you wouldn’t run that out right now?
CAMP: We have to look at where the rest of the world is. The rest of the world has much lower investment taxes than we do in the United States. And so we have to be aware of where the rest of the world is, is, as well, on that before we just -- the problem with...
HUNT: Ronald Reagan raised the capital gains and dividends tax. That didn’t hurt the economy, did it?
CAMP: Different time, obviously, a different set of circumstances. The world economy has changed dramatically. Capital is much more mobile than it was in the ’80s, so we have to take that into account as we look at it.
HUNT: Chairman Camp, you are in the middle of everything. Thank you so much for being with us, and have a very happy Fourth of July holiday.
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