House Ways and Means Chairman Dave Camp, R-Mich., is expected to release his long-awaited comprehensive tax reform legislation on February 26. According to congressional aides, lawmakers would receive a comprehensive discussion draft that simplifies the tax code and strengthens the economy for wage earners.
Rep. Camp’s previous proposals include a reduction of the corporate income tax rate to 25%, bringing it in line with the average of countries in the Organization for Economic Cooperation and Development (OECD). Recently, Japan’s PM announced his desire for rates to be lowered there. Japan and the U.S. currently have the highest corporate tax rates among the world’s developed countries.
A second major initiative on Rep. Camp’s agenda has been a shift from a worldwide system of taxation to a territorial-based system. Rep. Camp believes it is time for a complete review of our international tax laws. He has pointed out that the current rules have been in place for 50 years, at a time when the U.S. had no serious global competitors, and the U.S. is losing economic ground.
Congress’ track record of attempts at “simplifying” the tax code is dismal and seems to lead to more complex rules and carve-outs for special groups. As a watcher of tax-related congressional discussions, I can appreciate a desire to want to hold your breath for the latest launch. This time, I may be more excited to watch the Olympic cross-country skiing (apologies to those of you who are avid cross-country skiers).
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