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Thursday, July 6, 2017

Ryan says tax reform will happen in 2017

Speaker Paul Ryan speech on tax reform, 6/20/17

On June 20, 2017, Speaker Paul Ryan spoke to the National Association of Manufacturers about tax reform. He has a 1 minute YouTube video of highlights here. The tag line is "Tax reform is happening. Not next year or next Congress. It is happening now, in 2017."

Per his email message of 7/5, "We're not talking about some rinky-dink, watered-down version of reform where the status quo basically remains as is. No, instead, imagine transformational tax reform that closes decades of loopholes, shakes up the IRS, and actually encourages businesses to stay and grow here in America."

His email message of 7/6 includes: "America is losing good-paying jobs as businesses move offshore to foreign competitors with more competitive tax systems. Trillions of dollars—literally, trillions—are being stranded overseas as a result. And hardworking families continue to struggle under a tax code that is far too confusing and expensive. ... This unified Republican government—the House, the Senate, and the White House—are putting together a plan that will grow our economy and create jobs.

Our plan will simplify the code so you can file your taxes on a form the size of a postcard. And it will overhaul or corporate tax system—the worst in the industrialized worlds—in order to stop the drain of American businesses overseas."

Meanwhile, as I noted in my blog post of 7/2, Senator Hatch, chair of the Senate Finance Committee is seeking public input on tax reform ideas by July 17. He also has given assignments to some of the committee members and wants to work with others including Democrats. 

That statement along with Ryan's suggestion of transformational change sounds like they want a plan that can get bi-partisan support so it can be permanent rather than only a 10-year plan accomplished via budget reconciliation.

It would be nice to hear more about the progress of the House Republican blueprint released in June 2016. Is the Senate Finance Committee seeking input because they want something different or just to be sure everyone had an opportunity for input?  What about Senator Hatch's work on corporate integration? What about suggestions to pay for lower tax rates for corporations? Will the House Republican import tax (border-adjustable tax) remain? Which "loopholes" is Speaker Ryan referring to to close? How low can rates go in a revenue neutral manner by closing them?

Timing? The House and Senate are scheduled to be in recess for July 31 to September 4 (Labor Day). But that still leaves lots of days for hearings and markup sessions and conferences. And this process really kicked off in January 2011 with over 90 hearings held since then (see Congressman Camp's "First in a series ..." hearing link), lots of reports, working groups, discussion, etc.  That's more time that was spent on the Tax Reform Act of 1986 which kicked off in January 1984 with President Reagan's state-of-the-union speech and the Treasury issuing its 3-volume, 800+ page report on tax reform (including volume 3 on a VAT!). [See article on the history of TRA'86 and link to old Treasury reports on tax reform.]

What do you think? Will bi-partisan, transformational tax reform occur in 2017? What do you think it will look like?

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