Dave Camp Tax Reform Bill Research Paper Samples

Type of paper: Research Paper

Topic: Taxes, Reforms, Camp, United States, Economics, System, Democrats, Politics

Pages: 5

Words: 1375

Published: 2020/11/30

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Abstract

David Camp’s tax reform bill will not be successful for the time being because the Republicans are worried about the controversy it may cause and the Democrats cannot wait to criticize it. The bill would create nearly two million private sector jobs and increase the GDP of the nation by 3.4 billion. However, while the Bill provides a stepping stone in the right direction by simplifying our bracket system down to a three step-up rate system and making it easier for families to receive the highest possible deductions that they deserve, it is too substantial of an undertaking for our current legislative body.

David Camp was a Michigan republican representative for 24 years. His final term is just coming to an end and at the end of 2014 he released the Tax Reform bill of 2014, which most believe has no hope of passing but represents an important step in simplifying the tax code nonetheless. Current policy has seven personal income tax rates ranging from 10% to 39.6% Camps Bill would revert this to a simple step-up system: 10%, 25% and 35% tax rates. The highest rate being given to those singles making over four hundred thousand annually and families making over four hundred and fifty thousand annually, the same as the current tax code states. The per-child deduction would be increased to $1,500 while the mortgage interest deduction cap would be lowered to $500,000 from one million. He is also proposing to change the tax system for investment managers and impose a 0.035% tax on those banks that the FED has labeled “too big to fail” or systemically influential to the economy. Camp includes various exceptions for agriculture and low income not given to the upper brackets increasing the overall amount that they pay in taxes. This bill is a step towards simplifying the US tax code and balancing the budget.
I support this bill for five reasons in particular. The first is that it significantly simplifies the entire tax code of the United States. While the bill is nearly one thousand pages long, in comparison with the current code is very simple and straightforward which makes it easier for regulators and taxpayers. The second reason is that the reform plan increases the standard deduction for both individuals and couples to eleven thousand and twenty-two thousand respectively. This means that most people would be able to submit the more simplistic 1040A form instead of itemizes deductions. The third reason is that the bill decreases taxes in the domestic manufacturing sector promoting the building and growth of American companies, especially those in agriculture. The fourth reason is that the Joint committee on Taxation estimates that the bill will create 1.7 million private sector jobs. This is incredibly important because the private sector ultimately fuels the rest of the economy. The fifth reason is that it will allow about 95% of taxpayers to get the maximum deductions by claiming the standard deduction without having to search out every deduction possible and spend valuable time. The bill makes the tax code more user-friendly and easier for anyone to understand.
The tax code of the United States is badly in need of reform because the modifications made since its original enactment were not planned. Instead they built upon one another in a complex system resembling a spider web getting tighter over time in an attempt to stop anyone from passing through. Many families have a second member who would like to work but because the added income drops them into another tax bracket nearly, if not all, of the benefits to the family if he or she began working would be lost. This discourages people from wanting to enter the workforce. Our tax codes complexity means that it is no longer fair or conducive to the savings and investment needs of the citizens. Simplifying and streamlining the tax code is essential to the overall well-being of the nation. Part of the complexity is derived from the increasingly elaborate financial system in the United States. As financial engineers have become more adept at circumventing loopholes in the tax code, lawmakers have raced to keep up and the result is unjust and intricate. It would seem that rewinding the tax code to that used in the fifties when it was considered more reasonable and fair by the general population would be a good suggestion. However, the newly enacted intricacies of our current financial system would make that ineffective. In addition there were flaws in the fifties tax code including the fact that some taxpayers had to pay 91% of their income in taxes. However, today there are over one hundred tax forms used by individuals across the US. (The et al.)(Gleckman)
The erosion of the tax base caused by the many loopholes that taxpayers have found in order to pay less to the IRS have a significant impact on the financial state of the country both in real terms and psychologically. The government raises taxes to counteract the amount of loopholes and deductions used, now 34% of taxable income whereas in the fifties it was 17%, and the higher tax rates decrease spending and investing among households, decreasing the growth of the economy and increasing the government’s desire to prompt growth through spending. This spending requires more taxation. It is a vicious cycle that is detrimental to the general health of the nation and its individual citizens. The bill that David Camp brought to the house is 979 pages long and is still far less complex than the current code.
The problem with introducing any type of tax reform in our government is that the democrats and republicans have very different ideas regarding the purpose of federal taxes at their most basic level. Democrats believe that taxes should be used to fund all government spending which in turn prompts growth. Democrats feel that the government should be directly involved in the workings of the economy and the spreading of wealth while republicans feel that the purpose of taxes is to allow the government to perform essential functions such as defense, while allowing the free market capitalistic system govern our economy free from intervention. However while Camps bill does decrease the complexity of our tax code, over the next ten years the projected tax incomes remain the same as they are currently. This should put democrats concerned that the bill would cause a significant decline in government spending and economic growth somewhat at ease. (Barton)
Overall this bill has been deemed “dead” by both democrats and republicans for the time being. The republicans are not willing to risk any controversy during an important election year and the democrats do not like the simplified version of the code, they fear that after ten years the tax revenue will drop precipitously causing a decline in their ability to intervene in the economy should they deem it necessary. The bill would benefit the middle class of the United States by providing them with both a simpler way to file their taxes and valuable incentives. The tax reform bill has been extensively analyzed by the joint committee on Taxation which is a bi-partisan committee. They determined that the bill would create up to 1.8 million jobs within the private sector, allow about 95% of those people filing taxes to receive the lowest rate and highest deductions possible, and increase GDP by 20% or 3.4 billion dollars. It is difficult to see any of these outcomes as negative in regards to the goals of either party but current representatives in both the house and senate are far too divided to come to a consensus on tax reform. (Buck)
While the bill may not be passed or even considered in the near future it is a step in the right direction for both parties. The 2014 tax reform bill is a comprehensive new method of taxation that manages to simplify the code without adding in substantial inefficiency’s or weaknesses that could allow savvy financiers to take advantage of loopholes. The new bill would increase private sector jobs substantially and increase the nation’s overall GDP by approximately 20%. Throughout history it has always been clear that lower tax rates, especially on the middle class, have increased the economic growth and prosperity of the United States as a whole. Instead of attempting to fix the problems we have faced during and after the recession by involving the government as much as possible in the affairs of the financial system of the United States, legislators should focus on allowing the private sector to flourish because that is where most of the job creation is done. We need to stop making paying your taxes a weeklong affair and simplify it down to the basics. Camp’s bill is a stepping stone towards a more fair and just taxation system in this nation.

Sources

Barton, Stephanie. "Parties For Taxes: Republicans Vs. Democrats." Investopedia. N.p., 06 Nov. 2008. Web. 25 Feb. 2015.
Buck, Brendan. "COMMITTEE on WAYS and MEANS." Camp Releases Tax Reform Plan to Strengthen the Economy and Make the Tax Code Simpler, Fairer and Flatter. N.p., n.d. Web. 27 Feb. 2015.
"CAMP, David Lee - Biographical Information." CAMP, David Lee - Biographical Information. N.p., n.d. Web. 26 Feb. 2015.
"COMMITTEE on WAYS and MEANS." Camp Releases Tax Reform Plan to Strengthen the Economy and Make the Tax Code Simpler, Fairer and Flatter. N.p., n.d. Web. 25 Feb. 2015.
"Dave Camp Drops a Tax Reform Bill on His Way out the Door." Washington Post. The Washington Post, n.d. Web. 26 Feb. 2015.
Dubay, Curtis S. "How Tax Reform Would Help American Families." The Heritage Foundation. N.p., n.d. Web. 27 Feb. 2015.
Gleckman, Howard. "What Dave Camp's Tax Reform Plan Would Really Mean." Forbes. Forbes Magazine, n.d. Web. 27 Feb. 2015

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WePapers. (2020, November, 30) Dave Camp Tax Reform Bill Research Paper Samples. Retrieved December 01, 2021, from https://www.wepapers.com/samples/dave-camp-tax-reform-bill-research-paper-samples/
"Dave Camp Tax Reform Bill Research Paper Samples." WePapers, 30 Nov. 2020, https://www.wepapers.com/samples/dave-camp-tax-reform-bill-research-paper-samples/. Accessed 01 December 2021.
WePapers. 2020. Dave Camp Tax Reform Bill Research Paper Samples., viewed December 01 2021, <https://www.wepapers.com/samples/dave-camp-tax-reform-bill-research-paper-samples/>
WePapers. Dave Camp Tax Reform Bill Research Paper Samples. [Internet]. November 2020. [Accessed December 01, 2021]. Available from: https://www.wepapers.com/samples/dave-camp-tax-reform-bill-research-paper-samples/
"Dave Camp Tax Reform Bill Research Paper Samples." WePapers, Nov 30, 2020. Accessed December 01, 2021. https://www.wepapers.com/samples/dave-camp-tax-reform-bill-research-paper-samples/
WePapers. 2020. "Dave Camp Tax Reform Bill Research Paper Samples." Free Essay Examples - WePapers.com. Retrieved December 01, 2021. (https://www.wepapers.com/samples/dave-camp-tax-reform-bill-research-paper-samples/).
"Dave Camp Tax Reform Bill Research Paper Samples," Free Essay Examples - WePapers.com, 30-Nov-2020. [Online]. Available: https://www.wepapers.com/samples/dave-camp-tax-reform-bill-research-paper-samples/. [Accessed: 01-Dec-2021].
Dave Camp Tax Reform Bill Research Paper Samples. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/dave-camp-tax-reform-bill-research-paper-samples/. Published Nov 30, 2020. Accessed December 01, 2021.
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