Lew, Ryan bullish on tax reform
Treasury Secretary Jack Lew and Rep. Paul Ryan (R-Wis.) are sending signals that a deal on business tax reform is attainable.
While Democrats and Republicans are worlds apart on individual tax reform policy — a fact made clear in the days since President Obama unveiled his plan to cut middle-class taxes at the expense of the wealthy — both Lew and Ryan noted in separate appearances Wednesday morning that there remains bipartisan support on the business tax system.
Their public remarks come one day after President Obama laid out an individual tax plan largely perceived as far too progressive to get much traction in the Republican controlled Congress.
Lew said in a speech in Washington that there is bipartisan support to reduce the corporate tax rate from 35 percent to 28 percent, while using some tax revenue to pay for infrastructure spending.
“The fact is, there is a growing bipartisan consensus in Washington on how to achieve business tax reform, and we have a unique opportunity now to get this done,” Lew said. “On individual taxes we have differences that are very clear. … There is the possibility of a bipartisan consensus [on business tax reform].”
He said he looks forward to working with Ryan, chairman of the House Ways and Means Committee, “to make progress on reform.”
Just an hour earlier, Ryan said in an interview on MSNBC’s “Morning Joe” that there were areas Republicans and the administration could work together on tax reform.
“It’s a screwed up tax code. We need to fix it. The great agreements in the past have been done have been bipartisan,” Ryan said on MSNBC. “[Former President Ronald] Reagan worked with Democrats in the Congress to do the last round of tax reform in ’86.”
Ryan said that his plan regarding the earned income tax credit “basically mirrors the president’s proposal.”
Both Ryan and the administration have proposed bolstering the earned income tax credit, a tax break for people with low and moderate incomes to help move them out of poverty. Both Ryan and Lew signaled in their remarks they would support funding for the Highway Transportation fund, which expires this spring, to be lumped into the tax reform debate.
“There are areas we can find common ground,” Ryan said on “Morning Joe.” “We want to get a transportation bill done. We know we need to do this… so there are things I do think we can find common ground on.”
Ryan added that what helps is to lower the partisanship and lower demagoguery suggested the president avoid impugning Republicans when they don’t agree with him.
“He didn’t do that as much” in his State of the Union address, Ryan said.
Republicans and Democrats are still worlds apart on a host of other policy issues related to tax reform, with Democrats pushing to raise taxes on Americans who earn more than $500,000 annually, as Obama proposed in his address on Tuesday.
They also differ on how to regulate U.S. businesses that change their corporate headquarters address to take advantage of lower tax rates, a process known as inversions.
Lew said at the Brookings Institution, “while our views on individual tax reform may be far apart, there is a broad set of business tax reforms on which we should be able to agree.”