Comprehensive tax reform no longer in the cards, according to Janice Mays
Last week,聽笔辞濒颈迟颈肠辞鈥�s Brian Faler did a聽聽聽(paywall) with Janice Mays, the long-time Democratic staff director for the House Ways & Means Committee. Janice, who has just retired after a remarkable 40 years on the panel鈥檚 staff, is one of the wisest鈥攁nd nicest鈥攑eople you鈥檒l ever meet on Capitol Hill. Few understand the place as well as she does, so pay attention to her answers about tax reform, which I鈥檝e slightly abridged:
Q. Do lawmakers seem ready to tackle a tax code rewrite next year?
A. No. I think this election鈥as caused me to think we鈥檝e taken a step back鈥�. And Congress (has) moved from tax reform for everybody to tax reform for business, and now it鈥檚 talking about tax reform for international business. So it鈥檚 gone to a much smaller place鈥�. With this popular bent in this election, how does the next president鈥ivot and 鈥ocus on helping companies save taxes on their international income when individuals鈥� focuses are more toward themselves? ... I find it hard to think a new president鈥� can jump into that right now鈥nd I don鈥檛 see you succeeding on this without presidential involvement.
Q. But you don鈥檛 see comprehensive tax reform in the cards either?
A.聽I don鈥檛. ... Because you don鈥檛 have a unified sense even within one party of what that tax reform should mean. You have the words tax reform, you have the desire to do something that is big and useful. But you don鈥檛 have a prevailing view that this is direction one should take.... The Republicans in charge of the House, they have lots of different proposals. Some would get rid of the income tax altogether. Some would go to a very flat tax, some would go to a fair tax. You don鈥檛 have an underlying premise that is consistent. And then you don鈥檛 have trust between the two parties.
There, in two paragraphs, is the political problem. Yet, influential lawmakers on Capitol Hill are staking out their ground in the event the stars do align in 2017.
Senior Senate Finance Committee Democrat Ron Wyden (D-OR) has proposed a series of relatively modest housekeeping reforms that he thinks could garner bipartisan support in the coming years.
Over the next month, we may see several more proposals. Finance panel Chair Orrin Hatch (R-UT) may roll out his proposal for business tax reform, which will be based on a plan to end double-taxation of corporate dividends. At the same time, House Republicans promise their own tax reform blueprint, though it remains unclear just how comprehensive it 聽will be. This will be just one part of a broader policy agenda that House Speaker Paul Ryan (R-WI) promises to release through the month. Yet, as Janice said, individual lawmakers are all over the lot.
And then there are the likely major party presidential candidates. Donald Trump has proposed a massive $9.5 trillion tax cut, but it is based on the existing tax code and includes no real structural reform. Similarly, Hillary Clinton has proposed many modest tax subsidies for education, health care, and the like, as well as tax hikes on investors, high-income taxpayers, and business. But, like Trump, she has avoided anything that looks like broad-based reform.
Would either Trump or Clinton embrace a tax reform that is initiated in Congress? They might, if it looked like a political winner. But would lawmakers be willing to get out in front of a plan that would certainly create losers, as well as winners, without some assurance that the president would be there to back the proposal? As Janice suggests, that鈥檚 less likely.
For now, we are at what looks like the early stage of a聽, at least on Capitol Hill. Each side is throwing salt and stamping their feet. But will the contest ever really get started? That鈥檚 harder to say. But I wouldn鈥檛 bet against Janice.
This article first appeared at .
