Key GOP chairman says Geithner might be looking for revenue in tax reform

The Ways and Means chairman stressed that he didn’t want to characterize Geithner’s comments for him. But Camp’s statement to reporters also appeared to underscore the challenges policymakers face in overhauling the tax code, with major players in the debate yet to coalesce behind broad goals for reform.

The issue of how much revenue, if any, tax reform should raise is just one of the thorny issues officials will have to deal with as they delve into the nitty-gritty details of changing the system.

{mosads}Administration officials and lawmakers on both sides of the aisle have said revamping the tax code will be a long, time-consuming process. The Ways and Means panel is set to hold the latest in a string of hearings on the issue on Thursday, this one focused on business tax reform and job creation.

Camp and other Republicans have said they want to bring down both the top corporate and individual rates — which currently stand at 35 percent — to 25 percent, without reducing or adding to the deficit. 

The Obama administration has so far shown more of an interest in reforming the corporate tax code, with Geithner indicating that he hopes to decrease the top corporate rate to the high 20s in a revenue-neutral way.

Officials in both parties envision a tax reform plan that would lower rates while eliminating tax credits and deductions.

With all that in mind, Camp said Wednesday that he believed Geithner and the administration would look to raise revenues in the individual tax code.

“That’s what he was suggesting,” Camp said.

A Treasury spokeswoman responded to Camp’s comments in a statement, saying that the department did want revenue-neutral corporate tax reform.

“On the other hand, we have been clear that the effective tax rate for families earning more than $250,000 is at a historic low and that tax rates for these wealthiest Americans should be restored to the levels they were during the Clinton years as part of a broader effort to reduce the deficit,” said Sandra Salstrom, the spokeswoman.

With the Bush tax cuts set to expire at the end of next year, Democrats and Republicans are likely to face off again over whether to extend current rates for top earners. President Obama, in his April speech on deficit reduction, has also called for simplifying the individual tax code in a way that lowered both deficits and tax rates.

Camp said Wednesday that, at the meeting with the president, he again pitched the idea of a comprehensive overhaul of the tax code, arguing that it would help spur job creation and that many businesses currently pay taxes on the individual code.

The Michigan Republican said he hoped his ideas were received well, adding that he had noted that a bipartisan pair of veterans from the last successful reform of the tax code — former Treasury Secretary James Baker and former Rep. Dick Gephardt (D-Mo.) — had also called for a revenue-neutral reform.

“I’m not going to give up,” Camp said. “Because if you really want to get the growth in the economy, you’ve got to do both.”

The chairman also said that Wednesday’s meeting did not delve into the details of which tax credits and deductions could be scrapped to help pay for lower rates. But Camp’s Democratic counterpart on Ways and Means also signaled Wednesday that the time to begin that discussion is fast approaching.

“We clearly have to go beyond the generalities,” said Rep. Sandy Levin (D-Mich.), the ranking member on the committee.