Final PPT

Finding Success
Matthew Steele & Xiaoyun Shen
PA 5012 Section 4
Politics of Public Affairs
Past--Tax Reform Act (TRA) of 1986
 What is the Tax Reform Act of 1986
 Important players / reasons for passage
 Demise and erosion of the TRA
Current-- Affordable Care Act (ACA)
 What is the ACA
 Important players/ reasons for passage.
 Future fate of the ACA
Recommendations and Questions
Keys to Successful Reform
“Political Fate of general interest reforms turns on
the nature of the reactions, adaptations, coalitional
patterns, and investments the reforms generate from
social actors” – Patashnik 2008
--Keys to successful reform: Reconfigure political dynamic-• Realign public authority through shifting institutions
• Generate positive feedback effects that are louder than
negative feedback.
• Significant economic impact on market forces
• Absorb changes in the political environment.
• Shifts in decision-making venues
Previous Attempt at Tax
Tax preferences created complexities and
gross inequities
• 1962: Revenue Act of 1962
• 1969: Tax Reform Act of 1969
Pre-reform Environment
• Tax breaks as a means to reward
• No enough political constraints on the
creation of tax loopholes
• Tax writing system was open to
broader public participation
• Indifferent public support for specific
reform proposals
Tax Reform Act of 1986
• As of 2012, it is the most
recent major simplification of
the tax code
• Tax-revenue & distributional
• Broadened the tax base
• Eliminated many tax shelters
and other preferences
Why Tax Reform Act of
1986 Passed
• Skilled political entrepreneurs
invested time and energy in the
reform cause
• Influential political leaders’ gave
• Willingness of two parties to make
political concessions and grant
• Congressional leaders held the
reform coalition together
• Interest group influence
Demise and Erosion of TRA
• The tax base narrowed
• Tax rates were raised
• A host of new breaks were
• New corporate tax shelters
Demise and Erosion of TRA
Coalition collapsed: Key players gone from power
TRA failed to shift institutions:
Failed to raise government’s transaction costs
Authority remained in the hands of congress
Interest groups:
Failed to generate positive feedback effects
Changes in the political environment:
Failed to solve a deep partisan ideological conflict
Economic impact on market forces:
In general, overall economic impact was minimal
ACA Pre-Reform
•Numerous attempts at reform
in 20th century
•Major health care reform for
low-income and old-age
•“Working Poor”
increasingly grew as
demographic without
insurance (Gruber, 2013)
•General public not clamoring
for reform
ACA Pre-Reform
•President Obama makes it a
pillar of his agenda in his first
term (Karch, 2013)
•Unified Democratic control of
Legislative and Executive
•Interest groups open to
reform (AMA, pharmaceutical
industries, etc.)
Why ACA Passed
• Mostly through
parliamentary measures
• Main focus of Act on
financial reforms (i.e.
reduce deficit in long
• Key concessions were
made (no single-payer
option, removal of pork)
• Reinforced market forces
Will ACA Fail?
•Most controversial element,
individual mandate, has
withstood legal challenges
•Political feedback from
interest groups is generally
positive, especially amongst
those that would perceive
law to be negative
•Is seen as a moderate step
in the right direction
•Much of the
implementation of the ACA
is at a state level
Will ACA Fail?
•Both Democrat and Republican elected
officials displeased with ACA
•Many remaining implementation
•Not necessarily a realignment of existing
partisan structures
•Ability to change law entirely in the hands
of Congress and the President
•No immediate sunk costs
Supportive interest groups
help prevent reform failure by
promoting the legislation and
its impact through various
media outlets and its own
networks (Kingdon)
Increase cost-effective
research and limit costsharing for only proven cost
effective services (i.e.
preventive care)
Questions for Consideration
Are there other factors that are key to sustainable reform
that were not mentioned in this week’s readings?
Will the ACA remain a sustainable reform in the long-term?
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