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Praise from the Right, Left & Center for Camp’s Financial Products Tax Reform Discussion Draft

January 31, 2013

The Wall Street Journal: “Don’t give up on tax reform just yet…”
“Don’t give up on tax reform just yet…Late last week [Ways & Means Committee Chairman Dave] Camp released the second phase of his comprehensive tax overhaul plan, this one dealing with taxation of financial services.  He says that the current tax treatment of the financial industry inefficiently ‘taxes different financial services like derivatives, credit default swaps, options and futures contracts in different ways.’ He believes that ‘Wall Street needs to know what the rules are. Right now the tax code is like ‘whack-a-mole’ with new financial products coming on line but the tax code incapable of keeping up with the cascade of new products.’” Steve Moore, Wall Street Journal

National Review Online: “…benefit[s] the consumer…as opposed to the firms…”
“One of the advantages of a mark-to-market system is that it will discourage the use of derivatives as a tax arbitrage strategy and it will intend to increase transparency, which will tend to benefit the consumers of financial services as opposed to the firms that package and sell financial services…the Camp bill looks like encouraging news.” Reihan Salam, National Review Online

Jaret Seiberg (Guggenheim):  “…this plan could produce more economic stability.”
“On a macro level, this plan could produce more economic stability. That would be broadly positive.” Jaret Seiberg, Guggenheim analysis comment regarding proposed expansion of mark-to-market

CQ Roll Call: “As both conservatives and liberals applaud Camp…”

“Despite a fractious political environment, efforts in Congress to streamline and update the country’s labyrinthine tax system are quietly picking up steam, adding a twist to the ongoing debate over federal fiscal policy.  Michigan Rep. Dave Camp…released his second ‘discussion draft’ related to a comprehensive tax overhaul that he hopes to complete by the end of the year…Although Camp is a veteran House member with a strong conservative voting record, his latest discussion draft confounds conventional wisdom about the two parties.  More than any Democratic proposal to date, it would crack down on the ability of investment firms and wealthy individuals to limit their taxes through the use of complex financial instruments…As both conservatives and liberals applaud Camp, the debate over taxes seems poised to move to a new stage.” CQ Roll Call

Steven Rosenthal (Tax Policy Center): “…another big step forward…”

“Last year, Camp tackled international tax reform. His latest proposal to simplify financial taxes is another big step forward…The road toward tax reform will be long, but kudos to Camp for what he has done so far.” Steven Rosenthal, Tax Policy Center

Edward Kleinbard (Former JCT Chief): “Three cheers for Dave Camp.”

“’Three cheers for Dave Camp,’ said Edward Kleinbard, a law professor at the University of Southern California and former chief of staff of the Joint Committee on Taxation. ‘In contrast to prior experience, and in contrast to the administration, he’s doing two useful things: He’s doing a lot of hard work to come up with large-scale comprehensive tax reform packages, and he’s doing it in an open and transparent way.’” Edward Kleinbard in CQ Roll Call

Viva Hammer (Brandeis University Law Professor): “It’s a revolutionary change…”

“’Camp’s draft, which implements ideas that have consensus among many tax lawyers who work in the field, is the most radical proposal in financial products taxation since the income tax was created,’ said Viva Hammer…‘It’s a revolutionary change,’ she said in an interview today. ‘It really uproots the entire labyrinth of financial products rules and puts a single rule in its place.’” Viva Hammer of Brandeis University and former Bush Treasury Department in Bloomberg News

David Garlock (Ernst & Young) “These would be welcome changes to the tax code if enacted.”
“‘The proposals released today appear to be motivated by a desire to make the Tax Code work better,’ said David C. Garlock, E&Y’s director of financial services, transaction tax, in a statement. ‘The proposals with the broadest effect would appear to be those calling for marking to market of derivatives… Other provisions in the proposals generally would correct various problems with the taxation of financial products that have been identified by practitioners and bar association committees. These would be welcome changes to the tax code if enacted.’” David Garlock of E&Y in Accounting Today

CRFB: “…excited to see the tax reform process move forward…”
“The Discussion Draft reminds us that tax reform is about far more than just what to do with tax rates and which deductions or credits to reduce. Tax reform takes a careful evaluation of how to better have the tax code define income, promote growth, improve fairness, and prevent potential abuses…. We are excited to see the tax reform process move forward.” Committee for a Responsible Federal Budget

Micah Green (Patton Boggs): “…the proposal…at its core is a good thing…”
“‘To remove arbitrage opportunities between futures and swaps makes sense both on the tax and regulatory side,’ Patton Boggs tax and financial services co-chair Micah Green said. ‘And so clearly this proposal equalizes the treatment between futures and swaps, which at its core is a good thing.’” Micah Green of Patton Boggs in PoliticoPro