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Redesigning the US tax code

What is the tax code? It is a mechanism for collecting revenue to pay for government performance.

Dave Camp, Chairman of the House Ways and Means Committee

This may not sound like the hottest topic in the land on Martin Luther King day, but it has profound impact on the nation. When Dave Camp (R-Mich) wants to get fired up over overhauling the tax code, members from both parties should be all-in.

Consider what this means. First of all, it is a Washington DC thing to speak about “codes,” laws and regulations when we are truly speaking about the subsystems that make the American political system work. That is where the American political system and government are synonymous terms.

National Yield = Revenue + Quality / Cost + Time

That is an oversimplified way to consider it, but let’s start there.

The goal of the nation (public and private sectors) is to optimize return on national resources such that all citizens are ensured of having a good life.

A sustainable economy will generate sufficient yield that is akin to productivity by generating revenue and producing quality performance at the least cost and as soon as possible.

The role of government is to create the regulatory environment that is acceptable for individuals and corporations to optimize their performance.

The role of government is to make the nation secure and safe so that people can go about their business in private and with freedom.

When people deviate from acceptable behavior, or when they become victims of misfortune, then government by the people steps in to lend assistance.

Revenue is needed for many things and the amount is determined by these variables:

  • Legacy obligations
  • Current obligations
  • Set-asides for future planned, anticipated, and unforeseen obligations

Sources of revenue include working citizens, corporations, and wealthy citizens (working or not)

The rate of tax collection is determined by the condition of the sources of revenue, and by the preponderance of needs.

Variables include the rate and frequency of discretionary needs as well as the size and persistence of necessities.

The tax code becomes complex when special interests are considered for which they are permitted exceptions. Every exception raises questions about fairness and requires balancing among all of the parties.

One way to make it simpler is to eliminate exceptions.

Making the tax code fair is a matter of making it fit individual’s means to pay. That is why people are taxed at different rates. The number of brackets needed to accommodate the variance in individual incomes is a product of demographics and analysis that is under the direction of Congress.

Conservatives believe that there is a level of taxation that is so great that it undermines incentive of investors and wealthy persons. So, they want to keep the tax rate below that perceived level. They are influenced heavily by corporations and wealthy persons.

Proof of what works is realized in economic outcomes. Today’s outcomes speak to reforming the tax code because the economy isn’t satisfying the need for revenues.

Now, Dave Camp is in the lead.

“Dave Camp

Chairman of the House Ways and Means Committee
Assumed office January 5, 2011
Preceded by Sander Levin
Member of the U.S. House of Representatives from Michigan's 4th district
Assumed office January 3, 1993
Preceded by Fred Upton
Member of the U.S. House of Representatives from Michigan's 10th district
In office January 3, 1991 – January 3, 1993
Preceded by Bill Schuette
Succeeded by David Bonior
Member of the Michigan House of Representatives from the 102nd district
In office January 1989 – January 1991
Personal details
Born July 9, 1953 (age 60)
Midland, Michigan, U.S.
Political party Republican
Spouse(s): Nancy Camp
Alma mater: Albion College
University of San Diego
Religion: Roman Catholicism

Camp was born in Midland, Michigan to Norma L. Nehil and Robert D. Camp.[1] He graduated from H.H. Dow High School in 1971. He attended the University of Sussex, Brighton, England, 1973–1974 and earned his Bachelor of Arts, magna cum laude, in 1975 from Albion College in Albion, Michigan. He earned a Juris Doctor from the University of San Diego School of Law in 1978.

From 1979 to 1991, he was a partner with the law firm Riecker, Van Dam & Barker Private Counsel.”

Tax reform faces roadblocks

By Bernie Becker

GOP tax writers, seeking to be the first lawmakers in a generation to rewrite the code, already feel buoyed by what they see as newfound energy from rank-and-file conservatives on tax reform.

But while those conservatives want to make tax reform a centerpiece of the GOP’s 2014 agenda, Camp still faces many obstacles in actually getting a tax revamp into law this year – scheduled to be his last with the Ways and Means gavel.

In fact, other tax writers say Camp is unlikely to delve too deeply into the nitty-gritty of his tax reform bill – which he has been crafting, with much difficulty, for months – at the retreat scheduled for the end of January in Cambridge, Md.

Instead, the tax chairman will likely look to more broadly reassure Republican lawmakers that have heard much about the popular tax breaks that will be on the chopping block in a reform effort, according to an aide familiar with discussions.

Camp, the aide said, will not shy away from how difficult tax reform will be. But he will also explain the economic benefits he expects to come from a streamlined tax code, as he seeks to make Republicans more comfortable about reform prospects moving forward.”

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