Top Dem sees tough road ahead for tax reform package

Greg Nash

The top Democrat on the House’s tax-writing committee conceded Thursday that reaching consensus on a tax package this summer will be difficult at best.

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Rep. Sandy Levin (D-Mich.) said that there are “major issues” standing in the way of what he argued must be a bipartisan agreement on overhauling the nation’s tax framework.

Accelerated depreciation for manufacturers, for example, is just one of the big issues that must be tackled, he said.

But lawmakers have yet to sit down and start hammering out a plan on the tax front, with trade dominating the agenda for the House Ways and Means Committee so far this year, Levin said during a Christian Science Monitor breakfast on Thursday in Washington.

They have yet to address a tax extenders bill, as well. Levin said it is too soon to tell what is going to happen on that front.

Last week, House Ways and Means Committee Chairman Paul RyanPaul RyanThe Trail 2016: The fallout Funding bill rejected as shutdown nears Lawmakers clash over race claims in Flint aid delay MORE (R-Wis.) said he still hopes this summer to take the first step on what he views as a two-year process to complete comprehensive tax reform legislation.

President Obama and other senior Democrats have proposed using revenue from a tax overhaul for businesses to help shore up the nation's highways and roads, a top priority for both parties.

Ryan has said he's willing to work with the administration on that front. If lawmakers can complete the first phase on tax reform within the next few months, Ryan says, that would leave the fall open for any tax extender bills.

Still, the list of obstacles facing tax reform is long, even when negotiations are limited just to businesses. Obama and other Democrats have said they won't get on board with any plan that lowers the top individual tax rate from its current 39.6 percent.

For Ryan and Republicans, the problem is that sort of plan could easily leave out the small businesses that pay taxes as individuals — a key constituency for the GOP.

Small-business groups have already pushed back hard at Ryan's efforts to see if there's a tax reform plan that could work for them that doesn't include lowering individual rates.

Democrats and Republicans are facing those issues before they even get to the hard part: slashing tax incentives, many with the backing of interests groups and lobbyists, in exchange for lower corporate tax rates.

—Bernie Becker contributed.