As House Ways and Means Chairman Dave Camp gets closer to introducing a major rewrite of the tax code, the question of how the legislation will play politically is looming larger than ever.
The conventional wisdom has long been that a large-scale tax overhaul that scraps the current tax code for one with fewer deductions, credits and exemptions would be too controversial for any party to tackle on its own.
Recent signs that House GOP leaders may insist that Senate Democrats commit to a tax overhaul process in exchange for raising the debt ceiling reflects lingering concerns about the risk of unilateral action.
Although the Michigan Republican plans to write a bill and bring it to a committee vote this year, House GOP leaders have yet to promise floor votes on the legislation. Surrounded by Republicans who are eager to press ahead with a tax overhaul, House Majority Leader Eric Cantor of Virginia is a prominent voice behind closed doors urging caution.
Still, extensive discussions among Republicans are under way about how to undertake a far-reaching overhaul of the tax code that would pass not only the House but also the Democrat-controlled Senate and give the House GOP a convincing legislative accomplishment.
Some senior GOP aides are confident that a tax overhaul is just what the Republican Party needs to both energize its base and win over independent voters.
A tax rewrite could offer something for every Republican. In eliminating tax breaks for corporations and high-income earners, it should appeal to moderates who want the party to move in a more populist direction. And by using the resulting revenue to reduce tax rates, it should please conservatives who subscribe to supply-side economics.
Although some House Republican leaders, such as Cantor, want to improve the party brand this Congress by embracing relatively small, “family friendly” measures, those bills have run into some conservative opposition and received scant public attention.
Compared with other policies, “tax reform is one thing that unites our conference, now more than ever,” a House GOP leadership aide said, speaking on the condition of anonymity.
Going on Offense
GOP aides have been considering how to frame a tax overhaul bill. They say the pain of removing tax breaks would be blunted by the lower rates that households and businesses would get in return.
They also point to the public’s dislike of the current tax code and the appeal of a simplified system.
Camp has pointed to a poll he commissioned showing that Americans dislike the complexity of the tax code. In interviews, Camp talks as much about the time it takes to fill out tax returns as he does about economics. And when he does turn to the economy, he tries to appeal to the large majority of Americans who have jobs by emphasizing the need to lift wages.