To say that House Speaker Paul Ryan is jazzed about tax reform legislation is an understatement. During his recent television interview on the PBS NewsHour, Ryan’s expression changed markedly once the subject matter shifted from President Trump’s tweeting habits to rewriting the Internal Revenue Code. The mention of the House’s “Better Way” tax reform blueprint produced a smile reminiscent of a kid in a candy store.
Tax Analysts Blog
President Trump is in favor of the House's destination-based cash flow tax. Or at least that's what The New York Times made readers think after the president spoke to Republicans in Philadelphia. But the truth is much more complicated than that, and Trump has yet to mention the House plan since he told The Wall Street Journal that he found it "too complicated".
Many of the same people who underestimated Donald Trump’s political skills on the campaign trail are now overestimating his policy sophistication in the White House. Or at least the specificity of his policy agenda. This tendency was on full display last week around the subject of “border taxes.” The root of the problem seems to be this “border” word. Since it’s associated with more than one policy proposal, it’s made for a lot of (possibly deliberate) confusion.
One thing I learned in nearly 30 years of practicing law in the Tax Division of the Department of Justice is that attorneys check their politics at the door. Our job was to defend the full and fair administration of the tax laws, period. As a result, liberal democrats and conservative republicans advocated in courts around the country on behalf of the United States of America, without regard to their personal views or the political party that controlled the White House. That has been the prevailing attitude of career attorneys and political appointees in the Tax Division for more than 30 years. And I’d like to think it will remain that way.
The House Republican blueprint has received surprisingly positive reviews from many economists and tax observers. In one bold stroke, the destination-based cash flow tax could eliminate the aspects of the tax code that encourage businesses to locate jobs overseas. It could be a powerful engine for domestic job creation and economic growth. All that being said, however, it's time for House Speaker Paul Ryan and Ways and Means Chair Kevin Brady to accept that the tax will almost certainly never become law.
I have often said that tax reform is like the weather – everyone talks about it, but no one does anything about it. With Donald Trump about to become president, and his Republican allies in control of Congress, it would seem to many that tax reform is all but a done deal.
Swift (and probably piecemeal) destruction of the Affordable Care Act is a program fraught with peril -- both for Republican politicians and for millions of Americans currently insured through the individual market. As both liberal and conservative experts have noted, repeal without immediate replacement seems likely to disrupt insurance markets and leave chaos in its wake.
The new year is here, and 2017 has the potential to dramatically alter the tax policy climate in both the United States and Europe. Most obviously, the incoming Trump administration and its Republican allies in Congress would love to remake the U.S. tax code by repealing Obamacare (which has many important tax components) and passing a tax reform package that lowers rates and alters how business income is treated. In Europe, the populist wave personified by Brexit and Donald Trump could sweep away governments in France (most likely), Italy, and Germany (least likely).
Come January 20, a lot of Americans will miss some of the people in the current administration who have made our government run during the last eight years. I am among them. But unlike the millions who are lamenting the imminent departure of President Obama, my eyes will be trained on the building next door – the one with the statue of Alexander Hamilton on the south portico – the Treasury Department.
If you listen to the lobbyists, tax reform is always just around the corner. For years, Beltway mavens have been especially vocal about the urgency – and even the inevitability – of corporate reform. With some $2.6 trillion in corporate earnings “trapped,” “stranded,” “stashed,” or simply held overseas, the status quo has long seemed untenable.