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Wednesday, February 26, 2014

Six Reasons Why Tax Reform Won't Pass

1.     Tax reform is always tough because every tax preference has a constituency that will fight for its survival.

2. In Showdown at Gucci Gulch, Jeffrey H. Birnbaum and Alan S. Murray quote Reagan aide Richard Darman saying: “I couldn’t help thinking that if I were a lobbyist, I would stand in the hallway with a big sign saying EVERYONE INTERESTED IN KILLING THIS BILL, PLEASE MEET IN THE NEXT CORRIDOR … There would have been an enormous rush, and they would have seen the power of their collective action.” Twenty-eight years later, all the lobbyists have read that book, and they know how to build coalitions.

3. In 1985-1986, tax reform had the full weight of the Reagan Administration behind it. In his 2014 State of the Union, President Obama made a brief, vague reference to tax reform, but that was about it.

4. Consider the timeline of the 1985-86 bill. By February 1986, the House had already passed its version, and the Senate Finance Committee was holding hearings. Camp is like a college student who expects to research and write a passable senior thesis one hour before deadline. Lots of luck.

6. Congress lacks institutional memory on this point. The last major tax reform passed during the 99th Congress (1985-86). In the House, 20 current members (9 R, 11 D) of the 113th Congress (2013-14) served in the 99th. Neither Camp nor Boehner is among them. Twenty senators (8R, 12 D) served in the 99th Congress. Of this total, 8 were in the Senate at the time, while 12 were in the House.