Progressive derision aimed at Rep. Dave Camp’s DOA tax reform proposal earlier this week is turning into something a bit different: mild appreciation, along with rich enjoyment of the pressure congressional Republicans are under to repudiate Camp tout court.
[Camp’s] plan would impose a new fee on large banks (which enjoy an implicit subsidy by virtue of being so large they’re apt to receive a bailout if they fail) and caps the value of tax deductions, both goals embraced by Obama. It eliminates the carried interest loophole. It sets the top tax rate at 35 percent, not the fantastical 25 percent rate proposed by Mitt Romney, Paul Ryan, and other Republicans. Camp is actually committed to the goal of reforming the tax code in a way that maintains (rather than reduces) revenue levels, and holds the relative burden on the rich and poor constant.
In other words, if you give up, as Chait has, on Republicans ever agreeing to a tax reform plan that raises significant new revenues, it’s about as good as it’s going to get, so why not throw the man some encouragement even if there are problems with how, for example, the proposal deals with the working poor.
But however you feel about the proposal itself, it’s hard not to chuckle at the wrath being brought down on the congressional GOP by Camp, who has mightily displeased the financial services, petroleum and real estate lobbies. A Sherman/Palmer/French assessment in Politico today focuses on the reaction of big banks:
Wall Street is warning Washington Republicans: The money spigot is turning off.
Rep. Dave Camp’s tax proposal — which jacked up taxes on banks and threatens the bottom line of some major private equity players in New York — has infuriated donors in high finance.
Private equity and investment firms in New York are telling key Republican players in D.C. that commitments for big-dollar fundraising have been “canceled for the foreseeable future,” according to one GOP lobbyist with knowledge of the conversations….
Big banks want to turn Republicans against the bank tax. The situation puts the party at risk of seeing a reliable source of campaign cash dry up right in the middle of a critical election year.
The tax proposal itself is not even expected to get a vote in the House, since it’s so unpopular among most Republicans. That Wall Street would react so ferociously to a dead-end bill is a reminder of how hard a powerful player is willing to fight to protect its interests in Washington.
Big Oil is equally unhappy with a proposed change in tax accounting methods that would cut into their profit margins, and a proposed lowering of the cap for the mortgage interest deduction infuriates both banks and real estate interests.
It’s certainly beginning to sound like it won’t be enough for congressional Republicans to quietly diss the Camp plan and keep it from any sort of floor action this year; the offended lobbies want it denounced and rejected. This all makes it of even greater interest to progressives, who may well keep it alive in public discussion if only to watch Republicans squirm.