(TRNS) — Rep. Dave Camp (R-Mich.) unveiled legislation today aimed at simplifying the country’s tax code.
A Joint Committee on Taxation estimate of the plan shows that it will grow the U.S. economy and raise revenues for the federal government by reducing top rates paid by businesses and individuals.
It would treat investment income as ordinary wage income, and would consolidate several tax credits, such as those applied to education expenses.
Camp’s plan would increase the standard deduction and child tax credit, and would levy a new basis-point tax on big banks and insurance companies with assets exceeding $500 billion per year.
Politically speaking, the likelihood of Camp getting his plan approved is dim. As Senate Minority Leader Mitch McConnell (R-Ky.) noted Tuesday, Democrats won’t be eager to support a plan that doesn’t raise hundreds of billions of dollars in new revenue.
When asked about the legislation today, White House Deputy Press Secretary Josh Earnest called it a ”constructive, specific proposal,” but one that is unlikely to become law anytime soon.
“There’s not a great about of optimism on Capitol Hill for any kind of legislative proposal that seems complicated,” he said. “There is no doubt that, by any definition, reforming a tax code, particularly the business tax code, is complicated.”
Earnest said President Obama was pleased that Camp’s proposal treats carried interest as wage income instead of investment income, ends tax breaks for corporate jet owners and closes “a series of other unfair tax loopholes that don’t contribute to long-term economic growth.”
However, the spokesman expressed unhappiness over the fact that the plan does not raise taxes enough to reduce the country’s deficit. “That’s a source of some concern,” Earnest said.
The White House also opposes Camp’s plan to retire the Earned Income Tax Credit, which benefits low and moderate income working individuals and couples, particularly those who have children.
“The president believes that our tax system should reward hard work and one way we can reward hard work is to extend and expand the EITC,” Earnest said. “And, quite frankly, this does not seem like a very good time to be raising taxes on working people. That’s another aspect of Congressman Camp’s proposal that we do not agree with.”
Over in the House, Speaker John Boehner (R-Ohio) is not saying definitively whether he supports Camp’s bill.
“It’s time to have a public conversation about the issue of tax reform,” he said today. “This is the beginning of the conversation.”
In related news, a Senate investigative panel is out with a new report showing how thousands of Americans funneled billions of dollars into Switzerland from 2001 to 2008 in order to evade paying taxes on their earnings.
According to the U.S. Senate Permanent Subcommittee on Investigations, ”Credit Suisse opened Swiss accounts for over 22,000 U.S. customers with assets that, at their peak, totaled roughly $10 billion to $12 billion, the vast majority of which were hidden from U.S. authorities.”
“The Credit Suisse case study shows how a Swiss bank aided and abetted U.S. tax evasion, not only from behind a veil of secrecy in Switzerland, but also on U.S. soil by sending Swiss bankers here to open hidden accounts,” said committee Chairman Carl Levin (D-Mich.).
Levin is accusing the U.S. Justice Department of dragging its feet when it comes to collecting back taxes from those who sheltered their earnings in Switzerland.