Rep. Paul Ryan set an aggressive timeline for a tax reform Friday, saying that it had to be done before the end of the summer if it is going to be done during President Obama’s tenure.
“Summer is — if we’re going to find common ground on tax reform, that’s when it’s going to be found,” the chairman of the tax-writing House Ways and Means Committee told reporters Friday. “If it goes past summer, it’s hard to see,” he added.
Beyond the August break, the politics of the 2016 elections would make it difficult for the two parties to strike a major deal in which both sides would have to make compromises.
Ryan, a Wisconsin Republican who plays the leading role in setting policy for congressional Republicans, said he passed up a presidential run in 2016 because he sees an opportunity to achieve significant goals as Ways and Means chairman.
“I see a window of getting things done, and I don’t want to be clouded with that,” he said of a presidential campaign.
“I didn’t run for president because I think the best place for me is right here,” he said.
One of Ryan’s top priorities is comprehensive tax reform that would lower tax rates by broadening the tax base, by cutting credits, deductions and other preferences.
Ryan acknowledged that he and the White House face difficulty finding agreement on individual tax rates. President Obama raised the top rate to 39.6 percent in 2012 after a long and bruising showdown with Republicans and is not likely to budge on lowering it to the levels Republicans prefer.
Nevertheless, Ryan is open to a smaller deal on the corporate side of the code.
“If we can do tax reform in phases, and those phases work well, I’m open to doing that,” he told reporters. Ryan has stated a goal of a 25 percent tax rate for corporations, down from the current 35 percent, while the Obama administration wants a 28 percent rate.
The two sides face difficulty even finding a smaller deal, largely because of the difficulty of finding an agreement on how to tax the millions of businesses, such as partnerships, that are taxed through the individual side of the code.
But they’re working on that issue, Ryan said. “I have not heard any show-stopper phrase” on the issue from Treasury Secretary Jack Lew, he noted.
Ryan’s counterpart in the Senate, Finance Committee Chairman Orrin Hatch of Utah, has not set out any clear timeline for tax reform legislation.
Instead, Hatch commissioned bipartisan working groups to develop legislation pertaining to different parts of the tax code.
Hatch did not give those working groups any deadlines. In January, however, he did offer that a tax reform deal might be struck by May. That’s when the highway trust fund will need to be replenished, a need that Hatch suggested might be addressed as part of tax reform.
Figuring out the details of a massively complicated overhaul of the tax code would be time-consuming. But Ryan suggested Friday that the process would be accelerated by the fact that it would be bipartisan.
With only 54 members in the Senate, Republicans would need the support of at least six Democrats to overcome a filibuster.
Ryan has said repeatedly that he believes it will be one to three years until tax reform — either during Obama’s administration or in the new president’s in 2017. But he has said it will have to be done because of the tax code’s age, complexity and negative impact on economic growth.
