This morning, Ways and Means Committee Chairman Dave Camp announced that the House would act this fall, prior to the November elections, to extend current tax rates while outlining a process whereby the Committee would consider broad, comprehensive reforms to the tax code in 2013. This is obviously very welcome news to S-Corps and other job creators! Here’s what he had to say:
I can firmly say our goal is: One, block massive, job-killing tax increases; and, two, enact - not just pass - comprehensive tax reform. And, there is strong support to use the expiration of the 2010 compromise as leverage to force action in 2013 on comprehensive tax reform. How? Simple: in addition to extending current low-tax policies originally enacted in 2001 and 2003, we should enact fast track procedures to compel comprehensive tax reform next year.
I intend to continue taking an open approach to tax reform, because I believe Congress wants and needs to hear from a variety of voices. We want to hear from small businesses who for too long have been living in fear because they are worried they will be used as the next “pay for” on something like a student loan bill.
Chairman Camp’s comments reinforce House Speaker John Boehnerb’s remarks made earlier this week at the Fiscal Summit sponsored by the Peterson Foundation:
Any sudden tax hike would hurt our economy, so this fall - before the election - the House of Representatives will vote to stop the largest tax increase in American history. This will give Congress time to work on broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits, and special carveouts.
Our bill to stop the New Year’s Day tax increase will also establish an expedited process by which Congress would enact real tax reform in 2013. The Ways & Means Committee will work out the details, but the bottom line is: if we do this right, this will be the last time we ever have to confront the uncertainty of expiring tax rates. We’ll have replaced the broken status quo with a tax code that maintains progressivity, taxes income once, and creates a fairer, simpler code.
The sooner the House votes on the package outlined by Camp and Boehner, the better. Its only 229 days before we fall off the “fiscal cliff” and how the House plan will be received in the Senate is anybody’s guess. Will the Senate act and prevent Taxmageddon or, as with the budget, will it ignore the pressing needs of the economy and simply do nothing? The sooner the House acts, the longer the business community has to put pressure on the Senate to follow suit.