The chief Republican tax-writer in the House of Representatives is aiming to cut the top rate for individuals and corporations to 25 percent, laying down a marker in a likely years-long effort to overhaul the tax code.
"Chairman Camp will push for a top rate of 25 percent for corporate and individual tax rates, so that the tax code is simpler, provides more certainty and creates more opportunities for families and employers of all sizes," Michelle Dimarob, spokeswoman for Representative Dave Camp, chairman of the tax-writing Ways and Means Committee, said on Thursday.
Continue Reading Below
President Barack Obama and lawmakers are exploring an overhaul of the tax code, which all sides agree is exceedingly complex and lengthy at more than a million words.
Obama has begun specifically talking about trimming the top marginal corporate rate, now at 35 percent, among the steepest in the industrialized world.
U.S. Treasury Secretary Timothy Geithner said last month his goal would be get the corporate rate closer to that of major U.S. trading partners, around the high 20-percent level.
Obama wants to pay for the cuts by paring sections of the law that companies use to minimize their tax bill, a move expected to create a frenzy of lobbying among business wanting to preserve their favored breaks.
Many companies now pay rates much lower than the 35 percent rate, because of tax breaks, deductions and credits.
Camp and many others believe a revamp will require looking at both the corporate and individual sides of the tax code in unison, in part because many businesses file through the individual side of the tax code.
Tackling the individual rate may be more tricky, because Obama and many fellow Democrats want to return the top tax rates for high-earners to the steeper levels they were at during the presidency of Democrat Bill Clinton.
The top individual rate for the wealthiest earners is now 35 percent, and Obama wants to return that rate to 39.6 percent.
Camp and his counterparts in the Senate have begun a series of hearings on tax reform. He and others say an overhaul will take several years, akin to an effort under former President Ronald Reagan in the 1980s.