Bipartisan Approach to Tax Reform Needed, Say Former Hill Staffers

Tax experts on who worked on opposite sides of the aisle when the 2017 Tax Cuts and Jobs Act (TCJA, PL 115-97) was enacted agreed that bipartisanship will be required for “more stable, more predictable” tax reform.

Speaking at a May 23 Tax Foundation event, Katherine Monge, who was a tax policy advisor to former House Speaker Nancy Pelosi (D-CA) in 2017, talked about being “left out of the room” when the TCJA was negotiated. “Tax policy is hard,” said Monge, “and to keep 50% of the experts out of the room really suggests you’re not getting the best policy and the most well-written policy.”

And as a result of leaving Democrats out TCJA negotiations, Monge explained, “there’s no ownership of the policy decisions that were made in 2017 on the Democratic side” nor was there an “understanding of the choices that were made to get to the policy outcomes.”

George Callas, who was senior tax counsel to former House Speaker Paul Ryan (R-WI) in 2017, suggested that “the best permanent resolution of the TCJA next year would require a divided government.”

Both Monge and Callas agreed that in the years leading up to TCJA’s enactment “there was a bipartisan awareness that there were serious problems with our Tax Code.” But, Callas noted, “there were ultimately disagreements about whether tax reform should be revenue neutral, whether it should raise revenue to reduce the deficit, or whether it should be a net tax cut.”

Turnover in Congress.

Monge and Callas also spoke about the high turnover in Congress since the enactment of the TCJA. Callas said this “really risks … Congress not understanding how the pieces [of the TCJA] fit together, and just using them as a bunch of one-offs that were cobbled together into a bill.” He said it will be important to build understanding among members and their staff of the provisions, so they do not just consider them “in isolation.”

“We’re looking at a lot of new leaders or leaders in new positions in both houses of Congress, and potentially in the White House” said Monge, adding that it will take time for staff to get up to speed.

Social media.

Monge suggested that social media is having a negative impact on policy making. A tweet, she said, can “change the tenor” and “people’s understanding” of a bill. Members don’t hold town halls and “invite the entire district into the room” as often now, she added. “It’s much more difficult to have an open dialogue with a lot of different ideas.”

It’s now also more challenging to “put bill text out and let people view it, understand it, and suggest technical changes,” said Monge, which is the process by which “the most ideal bill writing would happen.”

Callas agreed, calling the impacts of social media on policy making “terrifying.” He gave the example of the tax bill (HR 7024) currently languishing in the Senate, noting that on social media, some people were saying “Congress is creating new welfare programs for illegal immigrants.” Because of that messaging, Callas explained, “now we have a huge portion of the country that is opposed” to the tax bill.

Ultimately what’s needed is a “policy outcome that works for the American people, that’s stable and predictable, and that makes the most sense given all of the other noise,” concluded Monge.