Subject: Update -- Ryan & Tax Reform
From: Dana <[email-masked]>
Date: Wed, 4 Nov 2015 20:02:00 -0500

Mike & Co. --

The most significant personnel question opened up by Paul Ryan's promotion was resolved this evening when the GOP members of House Ways and Means elected Kevin Brady of Texas the Committee's new Chair, succeeding Ryan.  

So the parlor game now is what this means for comprehensive tax reform.  Some say just fast forward to 2017 and tell me which is the president's Party.  But for some play-by-play, below is speculation about whether conditions for reform are propitious in the new regime. 

Best,

Dana

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Almost no one thinks sweeping tax change will happen this year, with Congress staring at a stack of unfinished business — or next year, when the 2016 election will loom larger.  But it’s suddenly a lot more likely in the early years of the next presidency, especially if the Republicans win the White House.   “It certainly comes as close to guaranteeing it as possible,” said a senior Republican staffer. “It’s his No. 1 priority — it’s what he cares about most.”

He is Paul Ryan, who as Speaker would be able to move a tax bill to his liking.  What that is is no mystery -- he aims to cut both individual and corporate tax rates in exchange for ending scores of credits, deductions and other special provisions.  Ryan was a driving force behind Republicans’ promises to cut the top individual and corporate tax rates to 25 percent, a pledge that debuted in one of his annual budgets. 

Like Obama, Ryan wants to expand the earned income tax credit, a wage supplement to the working poor.  He’s seconded the administration’s call to expand the program for childless workers, and increasing the maximum aid.

Earlier this year, he pushed for a corporate-only tax reform, arguing it was one area of the code in which Republicans might be able to work with the administration.  When that failed, he tried a more narrow reform with Sen. Schumer focused on rewriting the tax rules for multinational corporations.  That has stalled as well. 

Ryan wants to kill a long-standing deduction for state and local income taxes, something especially important to high-tax — and Democratic-leaning — states like California and New York. The federal government should not be forcing people elsewhere to subsidize them, Ryan has argued.

He’s pushed to pare back the so-called tax extenders, the mishmash of ostensibly temporary breaks for big banks, charities, teachers, energy companies and sundry others that Congress has been rolling over for years.

To be sure, Ryan will have plenty on his plate as speaker to keep him busy, and some predict his move will actually hurt the cause of tax reform.  A GOP Hill staffer said:  “If you don’t have your best mind on tax reform devoted to it, and instead have to run the entire House, then it certainly diminishes the prospects. Tax reform isn’t just a matter of the will of the House — it’s also the work of the committee,” [and Ryan is] uniquely qualified to go through all the nuts and bolts of this, and knows where the bodies are buried and who’s going to hate what, and who has to be accommodated here versus there.

The opposite view says Speakers can involve themselves in whatever issue they like. And though Ryan said he wants to decentralize power by having the committees take the lead in writing legislation, many predict he would be heavily engaged in any overhaul, even if he’s not running Ways and Means.

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Recent Updates:  

Ryan and Tax Reform (Nov. 4)
HTF/Pay-fors  (Nov. 3)
FRB System Risk Rule  (Nov. 2)
Ex-Im Reauthorization  (Oct. 30)
FRB Interest Rate Policy  (Oct. 30)
Tax Extenders  (Oct. 30)
Boehner Budget Deal (Oct. 27)
Debt and Debt Limit  (Oct. 22)
SEC Nominations  (Oct. 20)
TPP/Currency Manipulation  (Oct. 15)
FRB Dividend  (Oct. 7)
Jobs Report (Oct. 2)
Fiduciary Rule  (Oct. 1)
FY2016 Budget/CR  (Sept. 29)
Trade/TPP  (Sept. 25)
GSE Reform  (Sept. 25)
Carried Interest  (Sept. 23)
Bush Tax Cuts  (Sept. 15)
Puerto Rico  (Jul. 23)
Shelby 2.0  (June 24)