The Strange, Suicidal Odyssey of Dave Camp's Tax Reform Plan

Why did he announce a plan that he knew his own party would repudiate instantly?

| Mon Mar. 17, 2014 5:38 PM EDT

A couple of weeks ago I wrote about Dave Camp's tax reform proposal, and I was predictably dismissive. It was a decent effort, I said, but it was DOA before Camp even officially announced it. Still, "I'll be interested in following the reaction as everyone figures out just whose ox would be gored by his various bullet points. Should be fun."

In reality, I just forgot about it entirely. But it turns out that the biggest ox being gored by Camp's plan was Wall Street, which was very much not amused by his proposal to levy a small tax on large banks. They threatened to cancel all GOP fundraisers as long as the bank tax was on the table, and this was enough to bury Camp's proposal once and for all.

So far, so boring. Camp's proposal never stood a chance, and the fact that Wall Street happened to put the final nail in the coffin is basically just a footnote. Jon Chait, however, gets at something more interesting:

The whole point of the push-back from Wall Street, which has reinforced a wildly unenthusiastic reception within the GOP, is not only to prevent Republicans from striking a deal with Democrats.... It’s to murder his plan in a public way so as to prevent it from becoming the baseline for any future Republican agenda. That effort seems to be meeting with predictable, depressing success.

It leaves unanswered the basic mystery of why Camp thought he could write a plan like this in the first place. Sources I’ve asked believe Camp was playing a kind of double game, an interpretation that closely fits all the public reporting. He promised Republicans he could produce a tax reform that would lower the top rate to 25 percent, a holy grail of GOP policymaking, and which would produce a massive windfall for the rich. He had also given lip service to make sure his reform did not decrease tax revenue or increase the tax burden on the poor and middle class.

Meeting all these goals was arithmetically impossible. But Republican fiscal proposals usually come face-to-face with arithmetic impossibility. It is their oldest and most bitter foe. Usually they step around with some kind of evasion or chicanery. Camp actually gave in and acceded to his other, un-emphasized goals of revenue and distributional neutrality (that is, ensuring his plan raised the same amount of tax dollars and didn’t shift the burden downward). Nobody outside of Camp and a handful of allies seems to have realized this until the plan was already out in the open.

Unfortunately, this still leaves the basic mystery unanswered. It's true, as Chait says, that the usual Republican promise—we can lower top rates to 25 percent and make up for it by closing tax breaks—is plainly impossible and everyone knows it. It's a nice applause line, but it only works as long as the tax breaks are never spelled out, something that requires even more than the usual amount of smoke and mirrors we expect from politicians.

But here's the thing: obviously Camp knew this. Just as obviously, he knew that making the math work out would produce a plan that Republicans and their interest groups would hate. In the end, he could reduce the top rate only to 35 percent, and only at the cost of killing or reducing some very specific tax breaks that rich people didn't want killed or reduced.

Camp has been in Congress for more than two decades. He's hardly an ivory tower naif, and he must have known perfectly well that his plan would do little except to expose Republican hypocrisy on taxes. So why did he do it?