In major tax speech, Ryan offers few details on how he will undertake reform

Andrew Bahl

WASHINGTON — In what was proclaimed as House Speaker Paul Ryan’s first major speech on tax reform, the Wisconsin Republican underscored Tuesday the need to overhaul the tax code this year but offered few specifics on how that would happen.

In a speech before the National Association of Manufacturers here, Ryan reiterated some of his most prominent proposals to simplify how Americans pay taxes and touted the measures as a key to bolster the economy.

“Once in a generation or so, there is an opportunity to do something transformational — something that will have a truly lasting impact long after we are gone,” Ryan said in the speech. “That moment is here, and we are going to meet it. We are going to fix this nation’s tax code once and for all.”

The core ideas Ryan discussed were part of a proposal championed by House Ways and Means Chairman Kevin Brady, R-Texas, last year. Among the proposals he cited were reducing the number of tax brackets from seven to three and winnowing the number of deductions taxpayers can claim, toward the goal of reducing tax forms “to the size of a postcard.”

But the speaker did not elaborate on how he would implement such bold plans. Ryan spoke at length about the importance of using the tax code to keep American jobs in the country but offered few details about how to accomplish it, beyond noting that it is “one of the things that we are discussing with the administration.”

“We want foreign companies to become U.S. companies. We must think differently, so that once again we make things here and export them around the world,” Ryan said in the speech.

In the past, the speaker has advocated a “border adjustment tax” (BAT) that would subject imports to the corporate tax rate, while exempting exports. The speaker and his allies have called this an important step to encourage domestic manufacturing.

But many conservative groups have criticized the BAT, saying it would stymy economic growth and would result in higher prices for consumers. Even President Trump is said to have dropped his support of the BAT given its politically fraught future.

“The biggest impediment to pro-growth tax reform is the Border Adjustment Tax (BAT). It is a political loser. The BAT has become a ball and chain that is dragging down real, pro-growth tax reform,” David McIntosh, president of the conservative Club for Growth, said in a statement prior to the speech.

Speaker of the House Paul Ryan introduces his new tax policy Tuesday. (Photo: Aaron P. Bernstein/Reuters)

There are also concerns about how to pay for the package. While Brady’s plan is not intended to add to the deficit, some of the most conservative members of Ryan’s caucus have expressed support for greater tax cuts rather than ensuring that the plan is deficit-neutral.

Democrats hit Ryan from the other side, saying his plan was too vague and helped businesses at the expense of average Americans.

“I applaud @SpeakerRyan on his ability to give so many speeches on tax reform without ever sharing details of an actual plan,” Senate Minority Leader Nancy Pelosi tweeted.


Pelosi later sent another tweet saying changes to the tax code equated to “more tax cuts for corporations at the expense of everyone else.”

Even Ryan acknowledged past uncertainty about whether a tax overhaul would pass. If the speaker wants to fulfill his goal of passing reforms this session, he will have to juggle it with a host of other big ticket items, including repealing Obamacare, raising the debt ceiling and passing a budget.

Still, he emphasized that the issue would be a major priority for his caucus despite the long list of other issues.

“The cynics and the naysayers will be out in full force,” Ryan said. “You will hear that tax reform is coming along one day, then you will hear tax reform is dead, then you will hear it is back on track and then you’ll hear that it is on life support. … I’m here to tell you we are going to pass this reform in 2017.”

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