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Tax reform: If both parties love it, why doesn't it go anywhere?

A speech by the an oil industry lobbying group Tuesday showed how interest groups are influencing the process, worried that they could be the big loser in tax reform.

By Staff writer / January 8, 2013

Rep. Dave Camp (R) of Michigan, seen here with Speaker of the House John Boehner (R) of Ohio (l.) last week, has said the House Ways and Means Committee will consider tax reform this year.

J. Scott Applewhite/AP

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Washington

Almost everybody in Washington loves something called “tax reform.” It is hailed as a key element of any potential "grand bargain" for fixing America's chronic budget woes – a way for Democrats and Republicans to find common ground by making the tax code fairer.

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The idea is simple: scrape away a thicket of tax deductions and use that money to lower tax rates. But on Tuesday, a speech by the president of the American Petroleum Institute (API) showed exactly why that simple idea is likely to become a difficult slog.

In theory, API President Jack Gerard should be a political ally with the congressional Republicans pushing for tax reform. But Mr. Gerard signaled that his group wouldn't remain quiet in the tax debate – and he is just one of a legion of powerful industry lobbyists defending their interests by standing between the cuddly notion of tax reform and a concrete proposal.

“Energy access, not taxes, is the key to unlocking new revenues for our government,” Gerard said in his annual State of American Energy address.

Many Republicans might agree with him about increasing access, but they also love to cite tax reform as a significant cure for the nation’s fiscal ills. Ultra-conservative Rep. Jim Jordan (R) of Ohio says the individual tax code is “broken,” with too many loopholes, and that the corporate code is “stupid,” with the highest statutory rate among advanced economies.

President Obama, too, says tax reform is vital to fixing the nation’s economy and, perhaps, helping close America’s budget deficit. During the "fiscal cliff" negotiations with House Speaker John Boehner (R) of Ohio, the president tried to get the speaker to take his deal by saying he would endorse corporate tax reform.

With or without the president, the House Ways and Means Committee will plow ahead with reform of the tax code in 2013, says chairman Rep. Dave Camp (R) of Michigan.

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