Stars Align for Generational Tax Reform

Chair and ranking member of House tax-writing panel discuss prospects at GW.

image
From L-R: Former House Ways and Means Committee chairs Charles Rangel, D-N.Y., and Bill Archer, R-Texas, moderator Richard Cohen, Committee Chair Kevin Brady, R-Texas, and ranking member Richard Neal, D-Mass. (Photo by John Brandt)
March 21, 2017

Despite partisan clashes over many issues in national politics, the senior Republican and Democrat on the House Ways and Means Committee, which is responsible for tax legislation, said on Monday that there might be room for bipartisan tax reform in this Congress.

“Tax reform is hard. That’s why it only happens once in a generation,” said committee Chair Kevin Brady (R-Texas). “What makes this year so exiting is that many of the components that drove the success of the reforms in the 1980s have recreated themselves.”

First and foremost among those components, Brady said, was a public fed up with the complexity of the current code. The committee’s senior Democrat, Rep. Richard Neal of Massachusetts, added that any proposal would “have those that will do better and those that will do worse” and explaining the merits would be a key task for any legislator casting a vote.

The two legislators appeared as part of the George Washington University’s Graduate School of Political Management’s “A Generational Perspective on Taming the Tax Code” event, co-hosted by the Tax Foundation and the Archer Center, the Washington, D.C. campus of the University of Texas System. They were joined on stage by former Ways and Means Committee chairs Bill Archer of Texas and Charles Rangel of New York.

They key element for any successful effort, Mr. Rangel said, would be buy-in from President Donald Trump.

“Policy is going to need to be set by the White House… as a member, no president should ask me–no matter how ‘safe’ my district may be–to take on a bill that they don’t believe in. I have to know and trust what the president is saying,” Mr. Rangel said.

One area in which both sides voiced agreement was on the nation’s corporate tax rate, which at nearly 39 percent is the highest among industrialized nations, according to the Organization for Economic Co-Operation and Development (OECD).

“We have to address the American corporate tax rate,” Mr. Neal said.

Added Mr. Brady: “We’re in a competitive tax world, and they’re beating the tar out of us.”

However, Mr. Archer said that the answer wouldn’t be as simple as just lowering tax rates and broadening the tax base. “People react to proposals based upon how it’s going to affect them individually, not some broad scheme,” Mr. Archer said. Therefore, he noted, any proposal must carefully balance individual and national fiscal impacts.

 

News

Perceptions of President Donald Trump

March 08, 2017
Panelists at BBC radio taping at GW say Trump is without vision or untraditional, depending on your point of view.

Takeaways from President Trump’s Address to Congress

March 01, 2017
Mr. Trump avoided attacks and jibes, but priorities remain the same, GSPM Professor Michael Cornfield says.