With a new tax bill on the horizon, the Ford School of Public Policy organized a panel on tax reform with Public Policy dean Michael S. Barr and former U.S. Rep. Dave Camp, R-Mich., moderated by University of Michigan President Mark Schlissel.
The panel, which was arranged earlier in the semester, coincidentally took place Monday afternoon just as House Republicans passed their version of the tax reform bill mid-November and Senate Republicans passed their version early Saturday morning.
Camp served in the House of Representatives from 1991 to 2015, and as chairman of the House Committee on Ways and Means from 2011 to 2015. Barr served as the U.S. Department of the Treasury assistant secretary for financial institutions in 2009 and 2010.
The panelists discussed different aspects of the tax reform bills — the corporate income tax, impacts on higher education — as well as bills’ potential and expected economic impacts, and what happens next.
“Right now, we’ll be looking at a conference committee and that’s typically what happens after a bill passes. Under our system, the exact same language has to pass both the House and the Senate before it’s sent to the president,” Camp said. “These bills are different in many ways, so they’ll have a conference committee. Now I think this will be a relatively short conference committee because they’re on this time deadline. And the time deadline really is (regarding) the election in Alabama, that they don’t want to lose any votes.”
As chairman of the House Committee on Ways and Means, Camp worked on the Tax Reform Bill of 2014, which was never signed into law. He said the bipartisanship in writing the 2014 bill differed from the recent bills that have been passed along party lines in the House and the Senate.
The proposed reduction of the corporate tax rate has been a key feature of the recent tax reform bills and has been met with both criticism and praise, from the left and right, respectively. While Camp sees the reduction as opening the possibility for more economic growth and attracting business, Barr believes there are much more direct ways to raise wages and boost the economy.
“I think for this tax bill, these ideas that we need more growth in the economy was really a priority,” Camp said. “And the second was, ‘How do we align ourselves with the rest of the world in terms of international tax policy?’”
“This bill, if you say the basic goal is helping the middle class or working-class people, there are much more direct ways to do that,” Barr said. “You could expand earned income credit, you could not do some of the other provisions that have to do with eliminating health coverage, you could lower the rates at the bottom and increase them at the top.”
Though Law student Shay Moyal does not necessarily agree with the reform bills, he said there are parts of it he still needs to learn more about.
“I have a lot of feelings about the tax bill and I still need to learn it. I believe it’s probably more aggressive than I think it should be, but everyone has (their) own opinion,” Moyal said. “I know something they missed a lot was the international aspect.”
Following the Congressional Budget Office, which is recognized for doing nonpartisan analysis on legislation, reported there would be a $1.4 trillion increase in the deficit — and Camp said there has not been as much talk about the possibility of raising the deficit as there has been in the past.
“In 2010, I would say the deficit was just a white-hot issue,” Camp said. “Clearly, that has subsided significantly and there could be another reason for that, but in this last presidential election, we didn’t really (touch) on the deficit at all from either side.”
Public Policy senior Connor Priest said he had heard many of the points made by the panel already and does not support the reform bills.
“I think what they had to say was insightful, but overall just echoes common, mainstream things you hear about tax reform if you read up on it,” Priest said. “I think it’s (the bill’s) absolutely horrible. I think it’s the most horrendous piece of legislation that has come to the floor of Congress in years.”
Both the House bill and the Senate bill were rushed to the floor, in a manner neither Barr nor Camp agreed with. Senate Democrats took to social media to show the handwritten provisions written in, despite being illegible.
Schlissel introduced the concerns of many in higher education regarding the House bill, which would end tax deductions for student loan interest and tax tuition waivers for graduate students, and moderated Barr's.
Graduate students have expressed concern over the taxation of tuition waivers PhD candidates earn through teaching and research.
“We use the federal government to support lots of activities in the economy that we think are important. It’s hard to imagine a part of the economy that’s more important than investing in our human capital, in our students and young people to get their education,” Barr said. “There’s always room for maybe a simplification of that … but if I were making the choices, I would be doubling down on the tax support we provide to our students, not reducing it.”