Filed Under:Life Insurance, Life Planning Strategies

Lobbying fury begins over tax revamp with dim prospects

Camp’s draft proposal, if implemented, would be the most complete restructuring of the U.S. tax system since 1986.
Camp’s draft proposal, if implemented, would be the most complete restructuring of the U.S. tax system since 1986.

(Bloomberg) -- For a plan unlikely to become law anytime soon, Representative Dave Camp’s proposal to revamp the tax code is causing a lot of agitation among U.S. companies.

The American Petroleum Institute says accounting rule changes could depress energy production. The Financial Services Forum, representing chief executives of the nation’s biggest banks, warns that a tax on their companies’ assets would curtail lending. The National Association of Realtors objects to changes limiting deductions of mortgage interest and property taxes.

Business groups

The largest U.S. business groups, including the U.S. Chamber of Commerce and the Business Roundtable, applauded Camp’s effort as progress toward boosting economic growth while stopping short of a full endorsement.

Still, Leonard Burman, director of the nonpartisan Tax Policy Center in Washington, said Camp’s proposal is worth studying as the starting point for future tax policy. In that sense, he said, Camp has done a “real service” by showing the tradeoffs needed to pay for rate cuts and simplification.

“Everybody knows that we need tax reform and I think anybody that pays attention knows that it’s hard,” said Burman, who was a Treasury Department official in President Bill Clinton’s administration. “Everybody who looks at the plan will have issues with it. That’s kind of the nature of tax reform.”

Dividends and long-term capital gains would have a 40 percent exclusion, leaving effective rates for the highest- income taxpayers little changed.

Taxpayers would have to live in their homes for five of the past eight years -- instead of two of the past five -- to exclude capital gains from their home sale from income.

Copyright 2016 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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