House Ways and Means Committee Chair Paul Ryan, R-Wis, recently stated that Congress has until the 2015 August recess to make progress on comprehensive tax reform. While Ryan stated that comprehensive tax reform will occur in phases over a one to three year period, he believes the first steps must be taken by August. Among the items he wishes to address are comprehensive items such as broadening the base and business tax reform. Ryan believes that while Republicans and the Obama administration differ on the scope of tax reform he still wants to explore non-traditional approaches such as the cash-flow business tax plan and the FairTax point of purchase consumption tax.

Although Ryan believes comprehensive tax reform is feasible in the near future, many still remain skeptical about the possibility of major reform. Viva Hammer, Counsel to the Joint Committee on Taxation expressed doubts about the political feasibility of reform due to the fact tax reform must be done as a whole to be at all impactful. Although individuals may want C-corp and pass-through reform, those entities are owned by individuals whose tax liabilities would also be affected. As Ms. Hammer states, “you can’t do surgery on the code that easily . . . if you reform business tax you also change the tax on individuals.” Further, business reform can be thought of in terms of competiveness and equality, while individual tax reform raises questions of fairness, equity, and emotion. The lack of public knowledge concerning the tax system combined with an American disdain for change would make such an endeavor very difficult.

Whether Ryan’s optimism will be met with equal enthusiasm by Congress remains to be seen. What is assured, however, is that Ms. Hammer’s view that business tax reform cannot occur without individual reform will make the endeavor daunting, if not impossible.

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