Could Paul Ryan preside over transformative tax reform?(Read article summary)
The new speaker hinted to colleagues and reporters he wants to pursue tax reform, but he may have to wait for a Republican president and a filibuster-proof Senate.
As chairman of the House Ways and Means Committee, Rep. Paul Ryan has been Congress’s go-to tax wonk. Now, as speaker of the House, that same passion is expected to be channeled into his leadership agenda, and some are anticipating a once-in-a-generation rewrite of the tax code.
Mr. Ryan hasn’t laid out specific policy proposals he would pursue as speaker, but he has flirted with some issues while avoiding others.
CNN reported on Ryan’s and Senate majority leader Mitch McConnell's contrasting approaches to passing legislation, and how thier differences may set the stage for collaboration between the two chambers. Recently, Ryan pressed Senator McConnell to attach a highway bill to an international tax code reform, which the majority leader opposed. The two have until Nov. 20 to reach a consensus.
Four years ago, Ryan authored the Path to Prosperity, the Republican’s proposed 2012 budget that passed the House but never made it out of the Senate. The plan would have eliminated about $800 billion in tax increases, lowered the tax rates for individuals, businesses, and families, and set the maximum rate for businesses and individuals at 25 percent.
According to Forbes, the plan would have also called for “consolidating tax rates for all taxpayers; reducing the corporate rate; repealing the Alternative Minimum Tax (AMT) and keeping capital gains rates low. Ryan also has his sights on a shift from a global system of taxation to a ‘territorial’ tax system to make, he says, the country more tax competitive.”
Politico’s Brian Faler reported Monday that, with Ryan as speaker, serious tax reform is more likely now than ever, but that it probably won't happen without a Republican president:
The sort of ambitious reform Ryan has in mind, which would be the first since 1986, promises to cut both individual and corporate tax rates in exchange for junking scores of credits, deductions and other special provisions. Any rewrite would be hugely controversial, with an array of powerful interest groups sure to line up to defend their favorite provisions, not to mention many Democrats who’ve long complained that Ryan’s plans amount to a giveaway to the rich.
Faler added that Ryan wants to halve the mortgage interest deduction by letting taxpayers “write off their interest costs on only the first $500,000 of debt.” He also wants to trash the tax exclusion for companies that provide employees health care in favor of a tax credit that could be used to buy individual plans. And he wants to end the state and local income tax deduction, while also thinning out “tax extenders,” a collection of tax breaks for a multitude of entities like charities, teachers, big banks, and energy companies.
Ryan’s agenda is unlikely to be fully realized with a gridlocked Congress, but the Wisconsin congressman does have a record of bipartisan compromise, particularly with Sen. Patty Murray (D) of Washington. The two negotiated a two-year budget deal back in 2013 that prevented a government shutdown and cut the deficit.