As my followers might know, the House Ways and Means and the Senate Finance Committees are the primary tax writing committees of the U.S. Congress. As readers might also know, Max Baucus, the former Chairman of the Senate Finance Committee and David Camp, the current Chairman of the House Ways and Means Committee have already moved or will be moving on in the near future, with Baucus being nominated and confirmed as the U.S. Ambassador to China and Camp announcing his retirement after his current term. Based on these major transitions and the current log jam in Congress, according to the Kiplinger Tax Letter of 06/20/2014, “tax overhaul won’t occur until 2018 at the earliest”.
Frankly, this might not be a bad thing, considering some of the provisions David Camp put forward in the Tax Letter of 03/14/2014 as his ideas for tax reform/overhaul:
as well as many others.
As I said above, holding off these proposed changes might not be a bad thing, seeing that, in my opinion, all Camp would be doing with his plans is moving taxation from one entity over to another, net-net, no chnge at all; in-other-words, rearranging the deck chairs on the Titanic!
As I see it, Tax Reform or Tax Overhaul should be an elimination of a majority of the current tax code, lowering rates, removing preferences, etc. In my opinion, moving in the direction of lowering/eliminating rates/code would increase growth with folks seeing less of their dollars going to the government and looking for ways to earn more or build/expand their business. Congress has to recognize it is human nature to try and earn more if folks can see that they are keeping more of their earnings in their pockets, which, even though the government is taking less of every dollar earned, will increase the total amount of tax taken because it is taking more tax due to growing earnings. In-other-words, expand the amount that is being taxed as opposed to moving the tax from one entity to another.