House Republicans Punt on Tax Reform
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.