The new House GOP budget shears off tax reform details that Republicans had proposed in past years, instead calling only broadly for a comprehensive revamp of the tax code.
{mosads}Rep. Paul Ryan (R-Wis.), the former Budget chairman, and former House Ways and Means Chairman Dave Camp had called for slashing the top corporate and individual tax rates to 25 percent in previous budgets, though they did not give many clues about which tax breaks would be sacrificed to pay for those reductions.
But the new Budget chairman, Rep. Tom Price (R-Ga.), only makes the same broad-brush case for tax reform that the GOP has made for years in his first framework. That decision gives more latitude to Ryan, now the Ways and Means chairman, as he works on tax reform.
Price’s 43-page budget says that a broad overhaul of the tax code – lowering rates for individuals, corporations and small businesses alike, while scrapping a range of tax preferences – will give a jolt to the economy.
But in a short section on taxes, Price, also a member of the Ways and Means panel, only specifically proposes to repeal the Alternative Minimum Tax, and move toward a system that shields offshore corporate income from U.S. taxation.
Previous Ryan budgets had called for implementing a 10 percent and 25 percent tax bracket for individuals, collapsing the current seven tax brackets into two and slashing a top rate of almost 40 percent. Ryan and Camp had also called for cutting the top corporate rate from 35 percent to 25 percent.
But when Camp released a broad tax reform draft in 2014, he was only able to get the top individual rate to 35 percent. Camp’s draft also got a chilly response from even Republicans – underscoring the challenge of tax reform in general, and the problems the GOP would face in turning their budget principles into actual policy.