Americans have been looking so hard and so long for any hints of economic normalcy that we’re beginning to forget just how good we once had it. George Will writes in National Review:
The euphoria occasioned by the economy adding 321,000 jobs in November indicates that we have defined success down. In the 1960s, there were nine months in which more than 300,000 jobs were added, the last being June 1969, when there were about 117 million fewer Americans than there are now. In the 1980s, job growth exceeded 300,000 in 23 months, the last being November 1988, when there were about 75 million fewer Americans than today.
To demonstrate how young people “are not getting the kind of start others got,” Camp offers a graph charting the “fraction of young adults living with older family members.” Beginning in the middle of the last decade, the line goes almost straight up, to almost 46 percent. For those 25 to 34, median household income plunged 8.9 percent between June 2009 and June 2012, the first three years of the recovery.
Surely it is time to give earners on the lower rungs of the ladder of upward mobility a boost by cutting their payroll taxes.
It should be clear to anyone that is paying attention that today’s youth are off to a rough start to their working lives. College costs have been skyrocketing just as job and wage growth has been plummeting. That’s a crippling cocktail that risks leaving an entire generation in an enormous financial hole, one that will take decades to claw out of.
Tax reform could undoubtedly serve as the ladder we need to begin the climb. And yet, despite the near-consensus that the tax code needs updating, championing the cause of tax reform is dangerous political business. For proof just ask Rep. Dave Camp, the retiring chairman of the Ways and Means Committee, who has spent much of his 24 years in Congress trying to advance the cause of reform.
Last February Camp introduced a reform bill that seemed to check all the boxes – lower tax rates and a simpler, fairer tax code. Rather than assess the underlying policy Democrats immediately saw political opportunity and began wondering how a Republican could toss them such a softball.
“Frankly, I don’t understand the politics of it,” Rep. Jim McDermott (D-Wash) told POLITICO. “He knows it’s not going anywhere, but it will be used” against his colleagues.
“It doesn’t make any sense,” added Bill Pascrell (D-N.J.) “You don’t send up trial balloons on such significant issues – particularly in an off-year election.”
But Camp offered a simple answer. “I’m not satisfied with waiting,” he told reporters earlier this year. “I’m not going to settle for two percent growth and median incomes declining and more kids living with their parents. I want to see growth, I want to see jobs, I want to see higher incomes – tax reform can raise that.”
The nonpartisan, independent economists at the congressional Joint Committee on Taxation agree. Their estimates show that Camp’s plan would have increased the size of the economy by $3.4 trillion over the next decade, a 20 percent increase compared with today, will create nearly two million jobs, and produce an additional $700 billion in federal revenues.
Reasonable people, and indeed reasonable conservatives, can and did disagree about the details of Rep. Camp’s particular brand of tax reform. But he set out a blueprint—lowering rates and then recouping the revenue by closing loopholes and spurring economic growth—that should be followed by the able reformers to follow. One of the minds already at work is Rep. Paul Ryan, who has tackled issues ranging from entitlement reform to a comprehensive plan to reduce poverty.
Ryan’s first move is likely to be trying to change the Joint Committee’s process for scoring changes to reflect the advances in econometrics that have occurred over the last several years. By more accurately measuring the economic effects of tax legislation Ryan will be able to reduce tax rates beyond what Camp was able to achieve without impacting the deficit.
It’s sad that Camp will soon be leaving Washington without having ushered tax reform across the finish line. But his legacy lives on in the ideas of conservative reformers. Tax reform will happen and it will owe an enormous debt to the progress Camp made.