Rep. Dave Camp (R-Mich.) unveiled draft legislation on Wednesday that would reform and simplify the tax code in an effort to spur economic growth and create jobs.
The Tax Reform Act of 2014 would modernize the tax code for the first time in more than 50 years, creating IRS accountability, larger standard deductions, simpler taxation of investments and a new individual and corporate rate structure.
“This legislation does not reflect ideas solely advanced by Democrats or ideas solely advanced by Republicans, nor is it limited to the halls of Congress,” Camp, the chairman of the House Ways and Means Committee, said. “Instead, this is a comprehensive plan that reflects input and ideas championed by Congress, the administration and, most importantly, the American people….”
An analysis by the nonpartisan Joint Committee on Taxation concluded that Camp’s bill would create up to 1.8 million jobs, allow 95 percent of filers to get the lowest tax rate possible by claiming the standard deduction and increase gross domestic product by up to $3.4 trillion.
“…The bottom line: just saying ‘no’ is not a solution,” Camp said. “Washington must make real progress on the critical issues of the day, the most important of which is strengthening the economy. We can and need to work together to craft a plan that fixes our broken code and strengthens the economy so there are more jobs and bigger paychecks for hardworking taxpayers.”
The measure would establish an inflation-adjusted standard deduction of $11,000 for individuals and $22,000 for married couples. It would also increase the child tax credit to $1,500 per child. Seniors over the age of 65 would file a simple tax return called Form 1040SR.
The bill would also direct $126.5 billion to the Highway Trust Fund to fully fund highway and infrastructure investment for eight years.
The medical device tax and the medicine cabinet tax, which prevents the use of tax-free accounts to purchase over-the-counter medicine, would both be repealed under the measure.