Photograph by Andrew Harrer/Bloomberg

The Internal Revenue Service (IRS) headquarters in Washington, D.C.

Written with Peter Cook

The scandal at the Internal Revenue Service is emboldening the chief congressional proponents for rewriting the tax code, they said in an interview with Bloomberg Television.

“This actually leads to new momentum for tax reform,” said Senate Finance Committee Chairman Max Baucus in a joint interview with House Ways and Means Committee Chairman Dave Camp.

The pair spoke in the Capitol today in an interview with BTV’s Peter Cook for the “Capital Gains” program airing May 19.

Camp, a Michigan Republican, will lead the first legislative hearing tomorrow into the IRS’s selective scrutiny applied to small-government groups applying for tax-exempt status.

Groups with “tea party” or “patriot” in their names got tougher questions and experienced longer delays than others in a practice that the IRS admitted May 10.

“Now we understand the fear the IRS can put into people,” Camp said.

Baucus, a Montana Democrat, will follow with a hearing May 21.

Steven Miller, acting commissioner of the IRS, resigned yesterday. Today, President Barack Obama named Danny Werfel, controller of the Office of Management and Budget, as acting commissioner.

Camp and Baucus have been working together on rewriting the tax code to broaden the tax base and lower marginal rates. They’re cooperating even though they disagree on whether a tax rewrite should generate more revenue. Baucus says some tax changes should pay for deficit reduction; Camp disagrees and wants rate reduction only.

Original post is IRS Scandal Good for Tax Reform: Baucus, Camp, in Interview by Political Capital.

Photograph by Andrew Harrer/Bloomberg

House Speaker John Boehner, a Republican from Ohio, talks prior to an interview at the Capitol in Washington, D.C., on May 7, 2013.

“We’ve had four years of slow and anemic job growth — and frankly, it’s unacceptable,” House Speaker John Boehner said today.

The Ohio Republican attempted to turn the latest unemployment rate against the White House — 7.5 percent reported for April representing the lowest rate in four years — as something short of what President Barack Obama promised with his economic stimulus.
“Slow growth cannot be the new normal,” he said today at his weekly news conference in the Capitol — as Obama traveled to Texas to tout the potential for economic growth.

“We can’t cut our way to prosperity — we need real economic growth,” Boehner said, suggesting that “real tax reform” will contribute to that. House Ways and Means Chairman Dave Camp is promising a tax bill this year — though Republicans and Democrats are divided over whether that should result on added tax revenue or come out “revenue neutral.”

Obama is traveling to Texas to promote technology-based education, training and jobs as he seeks support in Congress for economic initiatives he proposed earlier this year.

Stops today around Austin, including at Manor New Tech High School and at an Applied Materials Inc. factory, as well as
meetings with students, workers and entrepreneurs, are intended to give Obama a platform to promote proposals from his State of the Union speech in February. Those include raising the minimum hourly wage to $9 and promoting spending on education, manufacturing-innovation centers, worker training and research.

   Bloomberg’s Margaret Talev, reporting from Texas today, contributed.

Original post is Boehner: Slow Growth Can’t be ‘New Normal’ by Political Capital.

Photograph by Tom Williams/Roll Call/Getty Images

Rep. Dave Camp, R-Mich., right, Chairman of the Joint Committee on Taxation (JCT), walks with Sen. Max Baucus, D-Mont., Vice Chairman, to a discussion of the JTC on the topic of reforming the U.S. Internal Revenue Code.

Welcome to Taxreform.gov — a new bipartisan entry on the Internet sponsored by Rep. Dave Camp, Republican chairman of the House Ways and Means Committee, and Democratic Sen. Max Baucus, chairman of the Senate Finance Committee.

Camp says he is “committed” to getting a tax overhaul out of his committee this year. Baucus, who will retire at the end of 2014, is working on a bill but can’t say for sure that his committee will produce one this year. They’re reaching out to the public for ideas as they move forward.

Bloomberg’s Richard Rubin writes about the “Max and Dave” tour underway, which comes with more than a website — there’s a Twitter handle too: @simplertaxes.

The two are talking about a zero-based approach to writing a new federal tax code that has undergone 15,000 amendments since 1986.

“What we’re trying to do is set up a framework where we don’t take the current tax code and see what individual thing we pull out — we take a blank piece of paper and start over,” Camp said in an interview on National Public Radio’s “Morning Edition” today. “There has been a lot of layering upon layering and tinkering of the tax code. The complexity is really the big thing that we’re going to try to get at.”

“One thing I know we agree on, and I know the American public agrees on, is loopholes, which allow corporations, many corporations, not to pay any income taxes,” Baucus said. “That’s just not right… When we start from scratch, start from no deductions, no credits, no exclusions, that puts the burden on them as those who want those provisions to state a better case as to why they should be there.”

The big question is what comes out of this potential tax reform: A gain in federal revenue that the White House is seeking, or the “revenue neutral” result of no additional revenue the House’s Republicans are demanding.

“That’s the fundamental question that’s being asked in this debate,” Baucus said. “My sense is, like a lot of things in this town, that we’re going to have to compromise. There is going to be some rate reduction. There is going to be some revenue raised.” The amount, he said, is what will have to be negotiated.

“I think that’s getting to the end game before we get there,” Camp said. “I can tell you right now most of my caucus is not in favor of more revenues. They think we did that at the end of last year. We’ve got to move forward on getting the policy right and working together to get the best possible tax code and then we’ll resolve those issues.”

While Camp promises a bill this year, Baucus is less confident: “We’ll see. I don’t know. I cannot answer that question definitively. It depends on how quickly we can get an agreement in our committee…

“We’ll reach a point where I think we’ll pass legislation,” Baucus said. “And if it’s good legislation that tends to make some sense, then it’s more likely that Majority Leader Harry Reid will want to schedule it on the floor, and it’s more likely that we’ll be able to pass it with 60 votes.”

Original post is Zero-Based Tax Reform: Camp, Baucus (‘Max and Dave’) by Political Capital.

Photograph by Craig Lassig/Bloomberg

Medtronic Inc. headquarters in Minneapolis, Minnesota.

Bipartisan  support for repealing the 2.3 percent excise tax on medical devices doesn’t mean the tax will get repealed any time soon.

The Senate’s 79-20 vote yesterday in favor of repeal was a non-binding amendment to the budget. Thirty-four members of the Democratic caucus joined all Republicans to back repeal.

“It sets the stage for some negotiations on it in the future,” said Sen. Amy Klobuchar, a Democrat and leading opponent of the tax whose state of Minnesota is home to device companies such as Medtronic Inc.

Klobuchar said today that the issue would likely be addressed as part of a major bipartisan budget deal or an overhaul of the tax code.

There are two reasons why repeal of the device tax won’t advance quickly.

First, lawmakers disagree on how to offset the approximately $30 billion increase in the deficit that would come from repealing the tax. Second, the House of Representatives, where tax legislation must start, doesn’t plan to pass any tax bills before it considers its rewrite of the tax code.

The device tax, enacted in 2010, took effect this year.

Two leading Democrats — Finance Committee Chairman Max Baucus and Majority Leader Harry Reid — voted against the proposal.

Original post is Medical Device Tax Repeal on Hold by Political Capital.

Photograph by Alex Wong/Getty Images

Speaker of the House Rep. John Boehner leaves after a media availability on Feb. 25, 2013 on Capitol Hill in Washington.

The best seat in the House belongs to a tax-code overhaul.

House Speaker John Boehner is reserving the bill number HR 1 for the rewrite of the tax code, according to Kevin Smith, a spokesman for the Ohio Republican.

It’s a sign of Republicans’ commitment to the issue.

In the last Congress, first-bill honors went to Republican attempts to cut discretionary spending.

In 2009, then-Democratic Speaker Nancy Pelosi reserved HR 1 for the economic stimulus.

Original post is Boehner: Tax Overhaul No. 1 Bill by Political Capital.

Photograph by Adam Bird/Bloomberg

Representative Dave Camp, a Republican from Michigan and chairman of the House Ways and Means Committee, speaks at a Rotary Club meeting in Midland, Michigan, in this file photo.

House Ways and Means Committee Chairman Dave Camp wants to break his panel into smaller working groups to tackle specific aspects of tax reform, Bloomberg BNA’s Marc Heller reports.

Ray Beeman, tax counsel to the committee, said in a webinar sponsored by Deloitte Tax LLP that Camp, a Michigan Republican, plans to have the bipartisan groups focus on subject areas that have yet to be defined. Camp is working with the committee’s ranking Democrat, Sander Levin of Michigan, to create the working groups, he said.

“I really think it’s an outreach effort,” Beeman said, adding that the groups’ main task will be to collect facts and at some point come back with a report. Camp has said he intends to pass a comprehensive overhaul of  tax policy by the end of this year.

The groups will probably call upon stakeholders in tax issues but wouldn’t hold public hearings of their own, he said. The plan for informal groups sheds light on Camp’s approach as he works to craft a proposal, though they can’t deal with every tax issue that a comprehensive bill will address, Beeman said.

One of those issues is likely to be an examination of the tax code’s Section 501, which governs the treatment of exempt organizations, according to Bloomberg BNA’s Diane Freda.

Because Congress is looking at changing revenue streams for Section 501 limitations on deductions, there will be a need for a wider conversation about that section, a Senate Democratic aide, whom BNA didn’t identify further, said at a joint meeting of the Great Lakes, Gulf Coast, and Pacific Coast Area Tax Exempt and Government Entities Councils and the Mid-
Atlantic and Northeast Pension Liaison Groups.

The imposition of mandatory amounts of charity care for tax-exempt hospitals — which some institutions had feared under past proposals by Senator Charles Grassley, an Iowa Republican — isn’t garnering much attention now, as sequestration takes center stage, the aide said. Even so, a re-examination of the effectiveness of the 2010 health-care law may follow once Section 501 has been implemented.

Original post is Camp Considers Working Groups to Tackle Tax Reform by Political Capital.

Photograph by Brendan SmialowskiAFP/Getty Images

New Jersey Governor Chris Christie addresses the 2012 Republican National Convention.

New Jersey Gov. Chris Christie, keynoter at the Republican National Convention this year, has fielded some criticism for not taking his famously combative game to the national television audience watching his party’s show. He’ll get another keynote assignment in Washington this month.

He defended himself today against critics looking for more red meat in Tampa.

With a packed auditorium and millions of television viewers, Christie said, he wanted to pitch a “positive case” to voters for why his party has the stronger vision for the presidency.

“Believe me, I had plenty of zingers against the president of the United States,” Christie said today of that “second American Century” speech he delivered. “But I really felt like, when I had those 22 million people watching me, that what mattered much more was not making a case against Barack Obama, but making a case for Republican governance.”

He’s not finished on the national speaking circuit, though. On Sept. 21., the Newark Star-Ledger notes, the governor will headline the National Republican Congressional Committee’s 2012 Battle Ground Fall Event with House Speaker John Boehner of Ohio. The event at the Capitol Hill Club will offer plenty of talk about the presidential and other race. Suggested contributions range from $1,000 to $38,500, with the big tickets buying a “private dinner reception with members of Congress,” according to the invitation.

Meanwhile, it’s back to business at home for Christie, conducting his 90th town hall meeting today.

His “Endless Summer Tax Tour,” prodding Jersey lawmakers to adopt his tax cuts, already had supplanted his “Jersey Comeback Has Begun.” Today, the first-term governor opened his town hall in Howell with an unfurled banner: “Christie Middle-Class Reform Agenda.”

Original post is Christie Sheathed His `Zingers’ by Political Capital.

Photograph by Jacquelyn Martin/AP Photo

Sen. Marco Rubio on Capitol Hill on July 12, 2012.

The Republican-run House voted this week, again, to repeal ‘Obama-care.’

The Democratic-run Senate plans votes next week on “in-sourcing” jobs and limiting excessive campaign spending — all of this “messaging” meant more for home consumption in election campaigns than for any real lawmaking.

Republican Marco Rubio, who says he’s ready to work with anyone of any party to address the real problems — tax reform and the deficit — says: “It’s really wild, but every single week here in the Senate we have votes on all kinds of things, but not this stuff. It’s all about messaging and talking points.”

In “Marco’s Mailbox,” the Florida senator’s video postcard to his constituents, he explains that fiscal cliff known as “Taxmageddon.”

“What happens is, the so-called Bush tax cuts, the current tax code, is set to expire at the end of the year… Everybody’s taxes are going to go up at the same time, and by that I mean everyone — middle class, upper class, everyone,” the senator says. “In addition to that, the Obama-care taxes kick in at the same time — all of these tax increases combined with catastrophic cuts in defense spending.”

Rubio may not become Republican Mitt Romney’s running mate this year — in fact, it’s a pretty solid bet he won’t (see Intrade) – yet he’s probably going to be around Washington for a few more years. Ever since his election in 2010, he says, he’s been talking about taxes and the deficit — “I said the whole debt-ceiling debate was the perfect opportunity for us begin discussing these things,” he says.

“Here’s the good news: everybody agrees,” Rubio says. “There is extraordinary support here in the Senate for tax reform.”

“But here’s the bad news — it doesn’t come up for a vote.”

“The good news is… We’re going to continue to press for action,” Rubio tells his Mailbox-openers, the senator voicing more love for America than for his party and a willingness to work with anyone on solutions. “The bad news is, I’m not very optimistic, because unfortunately there are just too many people around here who care about the next election rather than the next year or about our economy in the near term.”

Original post is ‘Taxmageddon:’ Rubio Ready to Talk by Political Capital.