House Republicans Punt on Tax Reform

By :: April 1st, 2014

The House Republican budget, released today by Budget Committee Chair Paul Ryan (R-WI), kicks the tax reform can down the road yet again. Not only does it fail to enhance chances for a tax code rewrite, it almost certainly sets the effort back.

This budget isn’t so much an actual fiscal plan (the framework for the 2015 budget was worked out by Congress months ago) as a campaign manifesto. And as such, it hits the standard GOP themes: Repeal “Obamacare,” spend more money on national defense, turn Medicaid into a block grant to states, and the like.

And reform the tax code. But the budget explicitly avoids proposing any plan. In the budget panel's official 99-page description of the budget, tax reform is covered in 2 ½ pages. There are gauzy platitudes galore. For instance, it tells us “a world class tax system should be simple, fair, and promote...economic growth.” Um, OK.

It tells us the House GOP has a “goal” of collapsing the current individual rate structure into two brackets—10 percent and 25 percent. And it includes some generic criticism of “special interest…loopholes.”

But to the surprise of absolutely no one, this budget includes no specific proposals for cutting any of those tax preferences. Not a single one. And it effectively turns its back on the tax reform plan drafted by Dave Camp, the GOP chairman of the House Ways & Means Committee.

Well, you might say, budget committees don’t normally draft specific tax bills. They leave that job to the tax-writing panels. You’d be right. Except, of course, the chairman of the tax-writing Ways & Means Committee has drafted a reform plan. But you’d hardly know it by looking at this budget.

Indeed, the budget summary explicitly “does not embrace any particular plan.” Oh, it has two nice sentences about Camp’s reform. But it says there are “many good plans” and throws Camp’s onto a list with ideas from Rep. Michael Burgess (R-TX), who would replace the income and payroll tax with a flat 17 percent wage tax; and Representative Rob Woodall (R-GA) who’d replace the existing code with a national retail sales tax.

The unwillingness of the House GOP leadership to distinguish between Camp’s serious but difficult plan and two largely discredited ideas is symptomatic of the state of Republican politics these days. It does, however, give lawmakers some cover in November. When Democrats accuse them of backing Camp’s plan to trim the mortgage deduction, as they surely will, now Rs can say, “Oh no, I didn’t vote for that. I voted for a budget that called for a ‘world-class tax system.’ ”

I won’t blame Ryan for this budget, which seems to be more the work of the House GOP leadership. And I don’t know if it will prove to be useful grist for campaign ads. But as a policy document, the tax section is not serious.

5Comments

  1. AMTbuff  ::  6:06 pm on April 1st, 2014:

    “as a policy document, the tax section is not serious.”

    100% correct. I have a feeling that both parties prefer our current tax system to any remotely viable alternative. Why not just admit that? Oh, I forgot: Campaign donations.

  2. Michael Bindner  ::  3:24 am on April 2nd, 2014:

    Ryan stopped being serious a long time ago. Sadly, he is in line to be the next Ways and Means Chair – unless the leadership decides it wants to govern or the Democrats have a very good November. Being the ranking member and keeping his base happy would be perfect for Ryan. He might even propose something creative – rather than block granting Medicaid and turning nursing homes into Hell holes (at least, those what already aren’t).

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  5. jim jaffe  ::  12:56 pm on April 2nd, 2014:

    as a devotee of both health reform (aka Obamacare) and tax reform, I’m struck by the political similarities. perhaps is just an example of everyhing looking like a nail to a guy with a hammer when the health debate began, all agree the status quo required improvement, but nearly all thought selected it as their second-best choice when it came to options. that’s playing out in today’s reaction to Obamacare where GOP yearns for the good old days. In the tax area, no one defends today’s code, but when specific options are put on the table, they often seem even more unpalatable. from my vantage point, the issues differ in tha Obamacare can make a real difference. difficult to argue there’s a similar necessity for tax reform