On Retirement, Values, Patience, and Strategy
House Ways & Means Chair Dave Camp will retire. The Congressman from Michigan will not seek reelection, he announced yesterday. House Republican rules barred him from remaining as chair of the tax-writing panel. The last nine months of his tenure will reflect his values: “I will redouble my efforts to grow our economy and expand opportunity for every American by fixing our broken tax code, permanently solving physician payments for seniors, strengthening the social safety net, and finding new markets for U.S. goods and services.”
Maybe values like that are key to tax reform. Yesterday’s TPC panel on the politics of reform suggested as much, as moderator Howard Gleckman notes. The three political scientists, Karlyn Bowman of the American Enterprise Institute, Chris Faricy of the Maxwell School at Syracuse University, and William Galston of the Brookings Institution, did not feel reform was imminent, given the current chasm-like partisan divide. But maybe it’s possible: Imagine a President who can connect values to economics while proving he or she can “get things done” and break partisan gridlock. Hope springs eternal.
Home sellers’ patience has been close to eternal. The rough winter stalled home sales but the market should bounce back in the spring, perhaps giving buyers a chance to take advantage of mortgage rates that remain relatively low. They might also look forward to the mortgage interest deduction, which proponents say encourages home purchases. TPC’s Eric Toder, finding no such encouragement, instead argues for a phase out of the deduction. He’s in favor of a “uniform credit for interest or first home purchases.” He’d gradually phase out the current deduction “to minimize market disruption.”
There may be a disruption to Caterpillar’s Swiss movement. According to a report released yesterday by the Permanent Subcommittee on Investigations, “Caterpillar paid over $55 million for a Swiss tax strategy that has so far enabled it to avoid paying $2.4 billion in U.S. taxes.” The company claimed that its parts business is run out of Switzerland, apparently by changing the name on its invoices, rather than by moving personnel or business activities to Switzerland. The strategy will be the subject of a hearing today.
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