Is Bipartisan Tax Reform Possible? History Says Yes
This week in Congress, Republicans are tirelessly working on tax reform. The House of Representatives is expected to vote this week on a bill that would overhaul the current structure, while the Senate is expected to vote the week after Thanksgiving on its own version.
Normally, this would be great news. It has been over 30 years since lawmakers have significantly revamped the tax code; changes are now long overdue. And No Labels’ polling clearly shows that Americans want reform. According to our Policy Playbook, 75 percent of people want to simplify the tax code, 77 percent want to modernize business taxes, and 84 percent want no net tax increase on lower and middle income families.
However, there is one major problem; the tax plans put forth by both the House and the Senate have virtually no input from Democrats. At this point, it is all but certain Republicans will try to muscle through legislation without any support from their colleagues across the aisle.
This is both bad public policy and bad for the American people.
It is in no one’s best interest to have Republicans unilaterally push through tax reform, the same way it was problematic when Democrats worked singlehandedly to pass the Affordable Care Act. This goes far beyond our core belief that collaboration is best for the country. If the bill passes through reconciliation, or has a simple majority of 51 votes without being subject to a filibuster, the bill will sunset after a decade. Washington would have to revisit this problem in another 10 years, creating unnecessary economic instability. But this yo-yoing of tax policy is completely avoidable if a bipartisan agreement is reached and the bill passes without reconciliation.
Moreover, we know that bipartisan agreement on this issue is possible. Thirty one years ago, President Reagan signed the 1986 Tax Reform Act, a plan that reduced taxes for everyone and had bipartisan support. During this time, Democrats and Republicans pushing for reform couldn’t agree on state and local tax deductions, also known as SALT. Republicans wanted it gone. Democrats pushed to keep it. Ultimately, it had to be removed in order for the bill to be passed. Since then, Congress hasn’t been able to achieve the same level of compromise, which is why we haven’t had another across-the-board tax reduction in decades.
As the tax reform debate heats up, we call on lawmakers in both chambers, especially the Problem Solvers Caucus in the House and Sens. Collins and Manchin in the Senate, to reach across the aisle and find consensus. The compromises reached during the Reagan administration that led to major tax reform legislation prove such collaboration is possible.
No doubt, tax reform is important. But it is more important to find solutions amenable to both parties that lead to real, lasting change.