Why the Republican Tax-Reform Proposal Is Likely Going Nowhere

As with immigration reform, Republicans may not want to pick a big policy battle before the midterms.

National Journal
Sarah Mimms
Add to Briefcase
Sarah Mimms
Feb. 26, 2014, midnight

After months of work, Re­pub­lic­an Rep. Dave Camp, the House ma­jor­ity’s lead tax-writer, is set to re­lease an out­line of his tax-re­form over­haul plan Wed­nes­day. But Re­pub­lic­ans are already say­ing it’s un­likely to go much fur­ther.

“I have no hope for that hap­pen­ing this year,” Sen­ate Minor­ity Lead­er Mitch Mc­Con­nell said of passing a tax-re­form pack­age.

The same thing happened just last month with im­mig­ra­tion re­form. House Re­pub­lic­an lead­ers trot­ted out their im­mig­ra­tion prin­ciples at their an­nu­al re­treat in Janu­ary and, just a week later, Speak­er John Boehner an­nounced that the cham­ber was un­likely to move le­gis­la­tion on the is­sue in 2014, cit­ing his con­fer­ence’s con­cerns about the ad­min­is­tra­tion’s will­ing­ness to en­force im­mig­ra­tion law.

Con­fused? Just look at the cal­en­dar.

Re­pub­lic­ans are, of course, eager to show their con­stitu­ents that they’re work­ing on con­ser­vat­ive policy ideas that will re­form the na­tion. But this is an elec­tion year, and the last thing many mem­bers want is to open them­selves up to cri­ti­cism over ma­jor and likely con­tro­ver­sial policy, such as over­haul­ing the im­mig­ra­tion or tax sys­tems.

Camp’s plan — which would over­whelm­ingly sim­pli­fy the tax sys­tem by us­ing just two tax brack­ets, at 10 per­cent and 25 per­cent — will be news for a few days. If it’s well re­ceived it could move fur­ther. If it’s torn apart, Re­pub­lic­ans can hope that the eight months between now and Elec­tion Day will mute any up­roar.

Re­pub­lic­ans be­lieve they will hold the House next year (with good reas­on) and that they have a shot at the Sen­ate. Push­ing either tax re­form or im­mig­ra­tion would de­tract from what the party be­lieves are win­ning ar­gu­ments over the Af­ford­able Care Act and the cur­rent eco­nom­ic cli­mate. As Re­pub­lic­an think­ing goes: Why mess with what’s work­ing?

These same is­sues were at play last year when Camp planned to re­lease a draft of his tax pro­pos­al in the fourth quarter. At the time, Re­pub­lic­ans were hurt­ing from poor polling num­bers in the wake of the gov­ern­ment shut­down and rid­ing on the troubled rol­lout of the Af­ford­able Care Act. Lead­er­ship asked Camp to wait.

Rep. Dave Reich­ert, R-Wash., who sits on the House Ways and Means Com­mit­tee, firmly be­lieves that House Re­pub­lic­ans are no longer fa­cing any real road­b­locks to re­form. Reich­ert poin­ted to Wed­nes­day’s draft re­lease as a sign for op­tim­ism.

“I think that there’s some pos­it­ive things that have happened that have sort of cre­ated move­ment,” he said. “And I think that Sen­at­or [Ron] Wyden be­com­ing the chair­man of Fin­ance on the Sen­ate side is a good thing. I think that the Obama­care rol­lout has sort of died down. That gives us an op­por­tun­ity to sort of high­light the tax-re­form bill.”

When they dis­cussed the pos­sib­il­ity of re­leas­ing a draft at this year’s Re­pub­lic­an re­treat in Janu­ary, Reich­ert said that the re­cep­tion was pos­it­ive over­all. The group of Re­pub­lic­ans con­cerned about mak­ing such a big move dur­ing an elec­tion year was small. Though as Billy House re­por­ted last month, even fel­low Ways and Means mem­bers were not op­tim­ist­ic dur­ing the re­treat that tax re­form in real­ity, however pop­u­lar it may be con­cep­tu­ally, would go any­where this year.

Reich­ert brushed off Mc­Con­nell’s Tues­day com­ments and said he is hope­ful that House lead­er­ship — which has not yet com­mit­ted to bring­ing the is­sue to the floor — will put pres­sure on the Sen­ate to act.

“The Sen­ate has sort of been a naysay­er on al­most any­thing in­nov­at­ive,” Reich­ert said laugh­ing. “So — not to slam the sen­at­or — but we’re plan­ning on mov­ing for­ward. I hope that the sen­at­or sees some be­ne­fit of mov­ing for­ward. And I hope our lead­er­ship and our chair­man are hav­ing con­ver­sa­tions with [Mc­Con­nell] and some folks over there.”

Boehner has been sup­port­ive of Camp’s ef­forts, but wheth­er the is­sue ac­tu­ally makes it onto the le­gis­lat­ive roster this year re­mains an open ques­tion. For now, Ways and Means mem­bers are just fo­cused on get­ting the pro­pos­al in­to a markup.

The Sen­ate ma­jor­ity is no more con­fid­ent that tax re­form is pos­sible this year. Ma­jor­ity Lead­er Harry Re­id echoed Mc­Con­nell’s state­ment on Tues­day, though he pit­ted the blame on Re­pub­lic­an ob­struc­tion­ism for pre­vent­ing a tax over­haul.

“It will be ex­tremely dif­fi­cult — with the ob­struc­tion that we get here from the Re­pub­lic­ans on vir­tu­ally everything — to do something that should have been done years ago. I think that Camp is right in com­ing for­ward with a piece of le­gis­la­tion,” Re­id said Tues­day.

Demo­crats are in an odd po­s­i­tion, Re­id noted, with the ab­sence of their own tax writer, former Sen. Max Baucus, who left Con­gress earli­er this month after he was nom­in­ated to serve as the U.S. am­bas­sad­or to China. Wyden of Ore­gon has since taken the gavel of the Sen­ate Fin­ance Com­mit­tee. “We’re over here start­ing over again,” Re­id said.

What We're Following See More »
Morning Consult Poll: Clinton Decisively Won Debate
2 days ago

"According to a new POLITICO/Morning Consult poll, the first national post-debate survey, 43 percent of registered voters said the Democratic candidate won, compared with 26 percent who opted for the Republican Party’s standard bearer. Her 6-point lead over Trump among likely voters is unchanged from our previous survey: Clinton still leads Trump 42 percent to 36 percent in the race for the White House, with Libertarian nominee Gary Johnson taking 9 percent of the vote."

Trump Draws Laughs, Boos at Al Smith Dinner
2 days ago

After a lighthearted beginning, Donald Trump's appearance at the Al Smith charity dinner in New York "took a tough turn as the crowd repeatedly booed the GOP nominee for his sharp-edged jokes about his rival Hillary Clinton."

McMullin Leads in New Utah Poll
2 days ago

Evan McMul­lin came out on top in a Emer­son Col­lege poll of Utah with 31% of the vote. Donald Trump came in second with 27%, while Hillary Clin­ton took third with 24%. Gary John­son re­ceived 5% of the vote in the sur­vey.

Quinnipiac Has Clinton Up by 7
2 days ago

A new Quin­nipi­ac Uni­versity poll finds Hillary Clin­ton lead­ing Donald Trump by seven percentage points, 47%-40%. Trump’s “lead among men and white voters all but” van­ished from the uni­versity’s early Oc­to­ber poll. A new PPRI/Brook­ings sur­vey shows a much bigger lead, with Clinton up 51%-36%. And an IBD/TIPP poll leans the other way, showing a vir­tu­al dead heat, with Trump tak­ing 41% of the vote to Clin­ton’s 40% in a four-way match­up.

Trump: I’ll Accept the Results “If I Win”
2 days ago

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.