Bank tax seen in plan coming from U.S. Congress's top tax writer

Reuters News
Posted: Feb 21, 2014 6:12 PM

WASHINGTON (Reuters) - A bank tax similar to one that President Barack Obama once proposed may be part of a broad tax reform package expected to be floated on Wednesday by the top Republican tax writer in the U.S. Congress, lobbyists and analysts said on Friday.

Representative Dave Camp, chairman of the tax-writing House of Representatives Ways and Means Committee, was considering the bank tax in a draft plan for tax reform, they said late Friday.

The measure will resemble one that Obama, a Democrat, offered in 2012, they said. That tax would have hit firms with more than $50 billion in assets.

Camp's bank tax proposal is "a traditional Washington trial balloon," said Jaret Seiberg, an analyst with Guggenheim Securities LLC. "By now, the sponsors know the reaction and have to decide whether to include it in the final version."

A spokeswoman for the Ways and Means Committee declined to comment.

Camp has said he will release a tax overhaul draft next week. It comes at a time when hopes for comprehensive U.S. tax code reform before 2015 have all but vanished.

Camp once promised a tax overhaul would pass the Ways and Means Committee by 2013, but no bill was introduced. Congress is still deeply divided over fiscal policy.

Camp's draft will also likely include tax changes for derivatives and the mortgage interest deduction, said Brian Gardner, an analyst at research group Keefe, Bruyette & Woods.

"We are confident tax reform legislation will not pass this year," Gardner said in a note to clients.

(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh, Bernard Orr)