An Easy Test for the Tax Bills


An Easy Test for the Tax Bills

An Easy Test for the Tax Bills

The current U.S. tax code runs to more than 70,000 pages. That might lead one to believe that the words “tax” and “easy” should never appear in the same document, let alone the same sentence.

Even the efforts in Congress to overhaul that hefty tax code can be difficult for a layman to track. The House and the Senate are each considering their own versions of tax legislation and the two bills differ on some major points. Moreover, whatever emerges is likely to change again on its way to a final passage.

But here’s an easy test that anyone can apply to see if the overhaul is on the right track: Does the bill under consideration have bipartisan support? If a bill is supported by lawmakers with substantially different viewpoints — Republicans and Democrats — then it is a safe bet that compromise was involved and action may be ahead.

“Congress produces the best legislation when it is considered through regular order and receives input from both Republicans and Democrats,” said Republican Senator Susan Collins, an honorary co chair of No Labels, in a statement last week. “We must work together to develop responsible solutions.”

Indeed, single-party legislation carries a price. Whatever you think about the Affordable Care Act, it was passed without any Republican support and it has arguably been the most divisive piece of legislation in the last decade. Efforts to repeal it without any Democratic support have fallen short.

Sadly, no efforts at tax reform have passed the bipartisan test so far. The House bill under consideration was approved last week by the Ways and Means Committee 24-16 on a party-line vote, without any support from Democrats.

Taxes Ain’t Easy

Of course, there’s a good reason that comprehensive tax changes are tough to tackle. There are a massive number of variables and the stakes could hardly be higher. The tax code directly impacts the U.S. economy, the federal budget, corporate treasuries and the income of almost every American.

The outcome of any changes, both individually and in concert, can also be difficult to predict. In fact, they are often a matter of opinion, and varying — even contradictory — analyses are common. As The Weekly Standard wrote earlier this month, “It is impossible to contextualize the unique circumstances of hundreds of millions of Americans who will be affected by Congress yanking a hundred different levers to produce a new tax system.”

That being the case, lobbies of every sort tend to surface and get vocal — sometimes strongly so — to protect or advance the interest of their constituents when tax changes are at hand. Associations representing real estate agents, home builders and small businesses have already been publicly involved in this year’s efforts. Hundreds more will follow.

It all weighs heavily on lawmakers, who have much to consider as they balance the needs of constituents, party, interest groups and the good of the country. It’s no wonder why the last major overhaul was in 1986, when Ronald Reagan was in office. That effort, which aimed to simplify the tax code, eliminate loopholes, lower individual income taxes and remain revenue neutral, was no smooth ride, either.

Lawmakers and others who were there describe it as a legislative odyssey as the legislation was chiseled into shape over more than a year of discussion, debate, committee hearings and markups. At one point, Reagan himself went to the hill to lobby for the bill. But it was bipartisanship that ultimately got the job done. When the Senate approved its version, the vote was 97-3, unanimity that would be surprising today. When the House approved the final bill, a majority of both parties were in support.

Sound Process, Sound Product

Smooth or not, efforts to overhaul the tax system are well underway. The House bill passed in committee could get a vote in the full House this week, and appears headed toward passage despite some vocal Republican opposition. Democratic support is very unlikely.

Meanwhile, the Senate Finance Committee will begin debate on its bill this week. As it stands, there are still major differences between the House and Senate bills on key provisions, including how they treat the state and local tax deduction; the start date for new corporate tax rates; the top individual tax rate; and issues concerning the estate tax.

However, a great deal will change before this debate is through, and it is difficult for most people to track all the permutations, let alone the impact of each. What can be monitored is the process. Is there bipartisan involvement and support? Is the process running according to the “regular order” Congress is supposed to use? What Congress does is important, but so is how they do it.

In the end, sound legislation can only come from a sound process.

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