Camp's budget another giveaway to rich
Dave Camp has a new federal budget reform proposal (pdf) that is making a lot of liberals weepwith joy. This is simply the result of how the Republican Party has gamed the system. After decades of absolutely unreasonable proposals like thePaul Ryan budget, when someone comes along with a budget that isn't completely delusional, liberals stand up and applaud.
Camp is a typical Republican piece of work. You can look at his positions and right down the list he is pure: anti-choicer, climate change denier, Social Security privatizer. And he's been pushing for more welfare "reform" because he's afraid single mothers aren't working hard enough. Remember in Republicanland, it is only important for rich mothers to stay at home and raise the kids.
As noted, the budget is not all bad. It gets rid of the carried interest loophole. It also imposes a fee on big banks for the government's implicit too-big-to-fail insurance. And after finding that he just could not make the numbers in his budget add up with his preferred top marginal tax rate of 25%, he changed it to 35%. So those things are okay, but I would hardly call them good. The carried interest loophole is a travesty, but it is not big: just $2 billion per year. Weshould charge the big banks for their safety net (however, breaking them up would be better), but as Dean Baker points out, Camp's fee is an order of magnitude less than what the banks are getting in return. As for admitting that he couldn't make the 25% tax rate work, that isn't saying much on its face and as we will see, it doesn't actually say anything at all.
Jared Bernstein has an excellent discussion on the Economix blog, The Promise and Pitfalls in a Tax Reform Plan. He focuses on Camp's "timing gimmicks." These are ways that Camp made his budget reform bill revenue neutral for ten years—the period over which budgets are scored. For example, "The corporate rate is phased in slowly, so revenue losses occur outside of the budget window." This means that the federal budget would be okay for ten years and then the deficit would explode causing Republicans like Camp to scream for cuts to entitlements and welfare for the poor.
It has other aspects that I don't like. He gets rid of our current seven tax brackets and replaces them with two: 10% and 35%. The truth is that we needmore tax brackets, not less. Republicans always claim that they do this to "simplify the tax code." But if you have ever done your taxes, you know the easy part is looking up your taxable income in the table. The hard part is determining your taxable income. So reducing the number of tax brackets isn't about simplifying anything. It is rather about getting to a flat tax. And Republicans are for a flat tax because they want to shift the tax burden off the rich and onto the poor.
Camp's proposal isn't about budget reform at all. Instead, it is yet another Republican plan to "starve the beast." Clearly, Dave Camp is smart enough to know that he had to throw in a couple of bones to the Democrats. But they aren't great bones and they are supported by more reasonable conservatives anyway. Otherwise, the proposal is just an attempt to get what Republicansalways want: lower taxes on the rich. The word is that Camp worked for yearsto try to make his budget work with a top tax bracket of 25%, so you can see what his actual priorities are. And he only managed to make the 35% number work with a bunch of tricks.
So don't be fooled: Camp's budget is just a proposal to lower taxes on the rich and starve the government of funds. It is a typical Republican proposal; it just doesn't sound as crazy as usual.
(Cross-posted at Frankly Curious.)