Obama Tax Plan Steps 'Forward' But 'Missed The Boat'
STEVE INSKEEP, HOST:
It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.
President Obama put tax reform back on the table this week. He called for changes to the corporate tax system. Tax rates would go down for companies, deductions would go away - many of them, and companies with overseas operations would find it a little harder not to pay.
Republicans do not like all of this plan, but have not rejected it either. Michigan Congressman Dave Camp is chairman of the House Ways and Means Committee, the tax writing committee. He's been pressing for a simpler tax code himself. And he's on the line.
Mr. Chairman, welcome back to the program.
REPRESENTATIVE DAVE CAMP: Well, Steve, good to be with you this morning.
INSKEEP: So what do you like about the president's proposal?
CAMP: Well, I like that he's finally come forward with something. And we've been waiting for a couple of years for some sort of tax plan. And while corporate only doesn't get at the way most of the businesses in America file now, because they're past (unintelligible) and file as individuals, it's a good step forward. And I welcome looking at the details of that.
I do think they missed the boat by not addressing the fact that the U.S. is the only country in the world left with a worldwide system of taxation. They don't really address the territorial reforms that I think is so essential if we're going to make our companies competitive overseas.
INSKEEP: When you say worldwide system of taxation, meaning that the U.S. will tax the overseas operations of American companies? That's what you're talking about?
CAMP: Well, we tax them here and we tax them there. Other countries have what they call a territorial system. They only tax them once. And so this double taxation traps money overseas. And we think that there's about a trillion dollars that could be brought back to the U.S. and invested here, private money that would really help get our economy going again. So that's a piece that they didn't include.
But I think it's important that at least a step has done. I hope it's more than just a document for the campaign and that there's something real behind it, because we do need to reform our corporate taxes.
INSKEEP: Not to get lost in the details here, but doesn't the president's proposal say that there's a minimum tax for overseas operations, but you get a credit if you've already paid a percentage of that tax to Ireland or France or wherever?
CAMP: Yes. That's very similar to the system we have now. It's not enough reform. We need to see more there. But, again, I hope this is just the opening shot and I hope we can develop it into something that really will do a better job of making sure that American companies that do business overseas can bring those profits back and invest them back here for American workers.
INSKEEP: Now, let's be realistic. It's an election year. It's going to be a tough election on all levels. Is this a realistic year to try for tax reform of any kind?
CAMP: Well, I think what we're seeing is we still have a weak economy. It's not growing. And we've got record debt and deficits. And I think there needs to be another way than just more taxes and more spending. So I do think there may be pressure to try to find some way to get growth and opportunity. And we can do that through both corporate and individual - a comprehensive tax reform plan would really help get our economy moving.
INSKEEP: But doesn't that make it even less likely to pass if you make it bigger? You said individual tax reform. Now you're talking about dealing with not just tax rates, but deductions that just about everybody in America claims for something.
CAMP: I think people are looking for bold leadership. Look, our economy's been not growing fast enough for a long time. We can't take care of the people that are coming into the workforce. It's not growing enough. I think it's time for bold leadership.
Yes, this is an election year, but I remember President Clinton signing welfare reform in August of 1996, a very important election year for him. And so you never know what presidents may do when the voters really weigh in.
INSKEEP: Very briefly, do you think people in your party are willing to sign on to tax changes that end up bringing in more revenue?
CAMP: Well, I think the particularly if the revenue is from growth. I think what can happen is if you can simplify the code and have everyone pay a more transparent effective rate, you can really - the complexity is really what's causing a huge wet blanket over our economy. And if we can simplify our code - there's been over 5,000 changes in the last 10 years alone - I think we can actually get economic growth that means more revenue comes to the government. I think that's something that we ought to really look at.
INSKEEP: Mr. Chairman, one other thing briefly. Your state of Michigan, of course, holds its primary next week, presidential primary. May well be a swing state this fall. You voted, we should mention, in favor of the auto bailout, if I'm not mistaken. Sixty-three percent of Michigan voters, according to one poll, supported that bailout. You've also endorsed Mitt Romney, who opposed the auto bailout. What would you say to one of your constituents who just disagrees with Romney on that?
CAMP: Well, I think there's a more important story to tell there. And one, I did support the loans, both when President Bush proposed them and when President Obama proposed them. But what I didn't vote for was a government bankruptcy. And what happened here was, 200 years of contract law was overturned when secured creditors were not first in line.
You know, we have a lot of Delphi workers in Michigan. And while the union workers got their pensions, the salaried workers did not. And that's the problem with a government-run bankruptcy and the decisions they make.
I think what Mitt Romney has suggested is it should've been a managed bankruptcy and the government shouldn't have been in the middle of it. And so, yes, we're all happy that the auto companies are doing better. Ford sort of reformed and is doing better on their own. Chrysler has paid back their loans. General Motors owes 25 billion in taxpayer dollars still. So there's actually a mixed story here, but obviously we're all happy for the companies that are doing better.
INSKEEP: Just very, very briefly. Do you think it's certain that Mitt Romney is going to win Michigan next week?
CAMP: I do. I think he'll do well here. The polls are starting to come around. He's running a very good campaign here. I think his tax reform plan that he just announced is actually very important, because he's suggesting a 20-percent reduction in marginal rates for everyone who pays taxes. And what's important is that not only gets individuals but it also gets to pass through entities I mentioned - the way most businesses file their taxes. And that will really help get our economy growing again.
INSKEEP: Chairman Camp, thanks very much.
CAMP: Thanks a lot, Steve.
INSKEEP: Representative Dave Camp of Michigan. Transcript provided by NPR, Copyright NPR.