It did look promising for tax reform at the start. Camp's draft plan started with extraordinarily positive responses (with caveats, of course) from prestigious individuals and groups on the left and the right. Washington Post columnist Steve Pearlstein and The Post editorial board, along with liberals Jonathan Chait and Matthew Yglesias, were complimentary, as were conservatives like Alex Brill, Ed Rogers, and Timothy Carney. There were quibbles about the details, but the fact that Camp had done what he set out to do—reduce tax rates, simplify the code, and keep the plan (at least for 10 years) revenue neutral, while also hitting the rich and major special interests to enable him to reduce the rates—was refreshing and admirable. Camp's plan also provided a terrific starting point for real debate and deliberation about major tax reform. In that sense, it reminded me of the Bradley-Gephardt plan in the mid-1980s that provided the framework for the 1986 tax reform.
But the enthusiasm for the effort and the framework that was expressed by editorial writers, intellectuals, and many journalists and tax analysts was not shared by the relevant pols. There was no enthusiasm shown by the Obama White House to engage Camp, leading Pearlstein to lament the loss of a great headline: "David Camp Heads to Camp David." There was no positive response from House or Senate Democrats. And then came the real kicker: Speaker John Boehner, a close ally of Camp's, reacted to his plan at a press conference by saying "Blah, blah, blah." Ouch.
The reaction by Democrats was in part a tribal reaction: If he is for it, we can't be. For many of them, Camp in other venues has been a hard-driving partisan, shutting out Democrats from actions on the committee (in sharp contrast from how Dan Rostenkowski treated Republicans during consideration of tax reform leading up to 1986.) Camp has vied with Darrell Issa in over-the-top partisan actions and rhetoric against the IRS. But even so, this was a serious plan with a lot for Democrats to like.
The other element, I suspect, is that Democrats don't have a lot of interest in tax reform that is revenue neutral. It will inevitably create winners and losers, and some of those losers will be Democratic voters, especially as rate reductions lead to capping or eliminating popular deductions like the state and local tax deduction or the one for mortgage interest. Democrats, including the president, see tax reform as a vehicle to get revenues, as part of a larger bargain to reduce the long-term debt. Embrace revenue-neutral tax reform, and you give up the best vehicle to achieve the greater goal.
For Republicans in Congress, any impulse to embrace or even say good things about the Camp plan was quashed quickly by the GOP monied interests whose oxen were gored by the plan—including hedge-fund billionaires hit by the changes in tax treatment of carried interest (remember, an idea that billionaire Stephen Schwarzman once equated to Hitler invading Poland), and the big banks hit by the Camp idea to tax the "too big to fail" financial institutions that escaped unscathed in the financial meltdown. As Chait details in his column, "Wall Street unleashed a furious campaign to destroy and isolate Camp, canceling all fundraisers for the party until his fellow members agreed to denounce his heresy." Soon, a passel of House Republicans, Camp's friends and neighbors, sent him a letter denouncing his plan, and embracing their version of crony capitalism.