Tax Analysts Blog

Are Republicans Throwing in the Towel on Tax Reform?

Posted on Jun 18, 2013

Does tax reform have to be bipartisan? Not necessarily. Decades ago, when Democrats held all the levers of power, they managed to push through some sweeping reforms without much help from their Republican colleagues. But in the modern era of divided government, tax reform is almost certainly going to be a bipartisan enterprise – or no enterprise at all.

Which makes it all the more illuminating that House Republicans have floated the idea of passing a tax reform bill without help from Democrats. Such a measure would have to be reconciled with eventual Senate legislation crafted by that chamber’s Democratic majority. But a GOP bill might serve as a reasonable opening bid for that negotiation. Or so the theory goes.

“I’d be satisfied if the House passed its best idea of pro-growth reform, and the Senate passed its best idea, whatever the vote structure might be,” said Ways and Means Committee member Kevin Brady (R-Tex.) in comments to The Hill. “I think it’s going to be difficult anyway — just tax reform by itself is, at every step of the way. Which is why it’s just important to keep taking those steps.”

Brady may be right – a single party bill certainly gets you closer to the legislative finish line than no bill at all.

But that’s not saying much. A single party bill also demonstrates (yet again) that tax reform is going nowhere fast. If Democrats and Republicans on Ways and Means can’t reach an agreement among themselves -- even after a protracted, honest, and genuine effort by panel chair Dave Camp to reach across the aisle -- then good luck finding compromise on the House floor (a.k.a. The Place Where Bipartisanship Goes To Die). As one Democratic staffer told The Hill: “If you can’t do a bipartisan vote from the get go, that’s not a good sign,” the aide said.

No kidding.

The real function of a single party bill is damage control. A GOP measure would demonstrate that Republicans gave tax reform a real shot. But once again, that’s not saying much. A tax reform bill with negligible Democratic support would not be an abject failure. At least not quite. But it would certainly be a waste of time.

Read Comments (1)

amt buffJun 18, 2013

Why is it so hard to understand that major change in any fiscal area is
impossible until the parties settle their fundamental disagreement on the
proper size and scope of government?

Any change to taxes will make it more difficult for one party to move toward
its desired size of government. Any change will have a partisan effect and
therefore partisan support and opposition.

It's not an accident that the 1986 Tax Reform occurred during divided
government, during a period lacking major fiscal challenges, and at a time when
neither party had any serious chance to change the size and scope of
government. Those conditions cannot recur until a fiscal crash resets
expectations.

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