Representative Dave Camp, the top Republican tax writer in Congress, said his plan to revise the U.S. code won’t increase taxes on capital gains and dividends.
Camp, of Michigan, wants to lower the top individual tax rate on ordinary income to 25 percent from 39.6 percent. Under current law, capital gains and dividends are in many cases already subject to a 25 percent marginal tax rate.
The basic rate is 20 percent, plus a 3.8 percent surtax that started this year, plus a 1.2 percent effective rate increase from a limit on itemized deductions.
“A cap gains tax hike is not going to happen,” Camp said, according to a column by Wall Street Journal editorial writer Stephen Moore posted on the newspaper’s website. “We think taxes on capital are already too high.”
Camp, who said he would release a plan this year to make the biggest tax code changes since 1986, has delayed the proposal. House Republican leaders are concerned about the tradeoffs in the plan and the potential distraction from their focus on President Barack Obama’s health care law.
Camp wants to lower tax rates for individuals and corporations and curtail breaks without shifting the tax burden from top earners to others. He hasn’t specified which breaks would change and how.
Before this year, the top capital gains and dividends rate was 15 percent. The 3.8 percent surtax, passed as part of the 2010 health law, took effect this year. The rate increase was included in a January agreement that prevented a tax increase for most Americans.