Taxes

Did McConnell Just Kill “Tax Reform?”

Written by SK Ashby

I would have told you the odds of passing sweeping "tax reform" were slim even before Senate Majority Leader Mitch McConnell spoke to Bloomberg this morning.

McConnell participated in an interview this morning where he said "tax reform" must be revenue and deficit neutral.

McConnell said in an interview Tuesday with Bloomberg News that the nation’s “alarming” debt requires an approach that would balance tax cuts with new sources of revenue to avoid changing overall government receipts. [...]

McConnell said the lack of Democratic support for a Republican tax package requires him to use budget rules that require revenue neutrality in exchange for pushing through permanent tax changes with only 50 votes. The GOP controls only 52 of the chamber’s 100 seats.

If you told me Republicans will pass revenue-raising taxes, even if it's part of a broader package that cuts taxes, I'd probably laugh in your face.

With Paul Ryan's border tax seemingly ruled out, with Trump calling for even bigger tax cuts than Ryan is, and with McConnell saying anything they pass must be deficit neutral, I don't know where that leaves them.

Paul Ryan's House of Lizards can pass whatever they're going to pass, just as they did with healthcare, but the Senate has a different set of rules. The Senate can't pass legislation that hasn't been scored by the Congressional Budget Office (CBO), for example, because they can't pass legislation that changes government receipts with a simple majority. A tax cut package, like those proposed by Paul Ryan and Trump, could be filibustered by Democrats and possibly even a handful of Republicans.

If Republicans were actually serious about passing neutral "reform" that merely simplifies the tax code while leaving overall tax rates the same, I believe they could pick up Democratic support and pass it, but they aren't serious. This isn't a vehicle for reform; it's a vehicle for tax cuts for the rich.

McConnell is the only Republican leader still feigning concern about the deficit, but he's not doing so out of the goodness of his heart. He's bound by the empirical rules of the Senate. He's probably even glad to be bound by Senate rules because it gives him a convenient excuse to avoid committing political suicide.