|US tax code compared with the Bible
Corporate Tax 2014: Dave Camp, the Republican chairman of the
tax-writing House Ways and Means Committee, released a sweeping tax-overhaul plan
on Wednesday, which triggered a flood of criticism. When asked about the
proposal’s details, Republican House Speaker John Boehner replied, “Blah, blah,
blah, blah” - - that was code for its chances of success in an election
The last big tax reform was in 1986 and Senator
Bill Bradley, one of the architects
wrote in 2009: "In 1986, before President Ronald Reagan, a Republican Senate
and a Democratic House succeeded in passing landmark tax reform, Washington
insiders and the press predicted — as they are doing now — that it would never
happen. There are lessons from the 1986 legislative experience that can be
applied to health care reform today."
The Wall Street Journal says the heart of the
Camp plan would collapse today's seven income tax brackets into three, with
about 99% of taxpayers paying 10% or 25%. The top statutory marginal rate would
fall to 35% from 39.6% for individuals earning wage income over $400,000
($450,000 for joint filers).
The corporate tax rate would fall to 25% from 35%, in a similar trade of a lower
rate and simplicity for fewer loopholes. US companies are now subject to the
highest combined federal-state tax rate in the developed world, which has
depressed hiring and wages and driven capital and talent offshore. Camp's plan
would make US business more competitive by cutting the rate closer to the
The plan would impose a levy on big banks.
“A tax that singles out one specific industry is
utterly inconsistent with the fundamental goals of tax reform to lower rates,
broaden the base, and remove industry-specific treatments,” said Rob Nichols,
president of the Financial Services Forum, which represents big banks. Meanwhile
housing groups criticised a reduction in the limit on the mortgage interest
deduction from $1m to $500,000 and the elimination of a deduction for state and
Also on Wednesday, Brady Dougan, Credit
Suisse’s chief executive, who is a US citizen, rejected allegations that the Swiss bank was a willing accomplice in US tax evasion,
blaming instead a small group of its private bankers for helping Americans
conceal their wealth.
Dougan told US senators that Credit Suisse only
uncovered “scattered evidence” of improper conduct, and its top managers were
not aware that a small group of Swiss-based private bankers had helped US
customers hide income and assets.
“We deeply regret that – despite the industry-leading compliance measures we
have put in place – before 2009, some Credit Suisse private bankers appear to
have violated US law,” Dougan said in prepared remarks issued before his
appearance later on Wednesday in front of a US Senate subcommittee on offshore
In Brussels Wednesday, plans to make companies
reveal how much tax they pay country by country were abandoned as
Germany and the UK argued in the European Parliament that the OECD is working on
new tax rules for multinationals.
Reuters reports taht one British diplomat, who asked not to be named, defended
his country's stance by pointing out that measures to set new standards for
companies are already being considered by the Organisation for Economic
Cooperation and Development.
Michel Barnier, the European commissioner in charge of regulation, expressed his
disappointment but said that he hoped the tax issue could be taken forward at a
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