Joseph Lawler reports for the Washington Examiner on fading hopes for federal tax reform.
Tax reform in the 114th Congress was always a remote possibility.
But now it looks like business and analysts are ready to move beyond the reform effort and on to other tax legislative items after Senate Majority Leader Mitch McConnell appeared to discount the possibility of a broad deal being reached in an interview published over the weekend.
“We’re certainly not going to be able to be doing big, comprehensive tax reform with this president,” McConnell said in an interview with the publication Morning Consult posted online Sunday.
While Republicans and President Obama have said throughout the year that they are working on a tax reform plan, the path to a bipartisan agreement has always been narrow and treacherous.
The two sides are too far apart on tax rates on high incomes to reach an accord on individual tax rates, so the Obama administration has sought a deal on just the business side of the tax code. Both the White House and Republicans favor lowering the U.S. corporate tax rate, the highest among developed nations at 35 percent, and broadening the tax base by eliminating credits and deductions. The two sides also agree on using some of the proceeds from repatriation of the $2 trillion-plus in U.S. corporate earnings overseas to finance infrastructure projects.
That effort was plagued, most of all, by questions regarding the tax treatment of the millions of companies that file taxes through the individual tax code.
