Why the 1986 Tax Reform Matters Today: Hatch vs. Schumer

Why the 1986 Tax Reform Matters Today: Hatch vs. Schumer


President Ronald Reagan signed the Tax Reform Act of 1986 into law 31 years ago this week. Today, two top senators hearken back to that bill in op-eds about the current tax reform push:

Orrin Hatch, chair of the tax-writing Senate Finance Committee, at CNN: “[O]ur tax code is stuck in the days where the Chicago Bears were winning the Super Bowl and ‘Top Gun’ was number one at the box office. ... In 1986, America's corporate tax rate was on par with other industrialized countries and our international code was comparable to those of our major trading partners … Today, we have the highest statutory and fourth highest effective corporate tax of developed countries. … [W]e are closer to the tax reform finish line today than we have been at any other point since 1986. Leaders in the Senate, the House and the administration are on the same page as we work to advance a tax reform proposal that would provide financial relief to low- and middle-income families, simplify our complicated tax code and allow businesses small and large, to compete in today's worldwide economy. Our updated system would provide clarity and simplicity. Under our proposed plan, the vast majority of taxpayers would be able to fill out their returns in a matter of minutes.”

Senate Democratic Leader Chuck Schumer in USA Today: “Anyone who remembers the substance and the process of the 1986 Tax Reform Act should be baffled that President Trump has compared his current tax plan to that famous bipartisan bill signed by former president Ronald Reagan. Trump’s partisan tax cut bill differs from that one in three major ways: It helps the rich at the expense of the middle class, it would explode the deficit, and it hasn’t gone through a thorough, bipartisan process. … The goal of the 1986 act was to simplify the tax code by bringing down rates while at the same time closing loopholes in the tax code. It did those two things in precise unison so that while the tax code got fairer and simpler, it would not add a penny to the deficit. Trump’s tax proposal eschews this model, promising lavish tax cuts to corporations and the top 1% while closing hardly any loopholes or correcting any inefficiencies in the tax code. … In 1991, Trump told Congress that Reagan’s 1986 tax reform bill was an ‘absolute catastrophe.’ If Reagan were here today to learn about Trump’s tax plan, I think he would return the sentiment.”