An expert in an era of tax reform

As Congress and the White House move toward the daunting task of tax reform, few people are more aware of the challenges they face than Mark Mazur.

In the Obama administration, Mazur served in the Treasury Department as assistant secretary for tax policy. This year, he became director of the Tax Policy Center (TPC), a joint project of the Urban Institute and the Brookings Institution.

Tax reform is “complicated technically, and it’s complicated politically,” Mazur said in an interview at the TPC’s office in downtown Washington.

Nevertheless, President Trump and GOP leadership have indicated that reforming the tax code is one their top legislative priorities of the year.

{mosads}Trump is expected to release his tax-reform principles on Wednesday. House Republicans, meanwhile, have been working to craft legislation based on a blueprint they released last year.

Mazur said the last time a tax-reform bill was signed into law, during the Reagan administration, it took years of negotiating. If Congress is able to pass a real overhaul of the tax code in 2017, it would be a “pretty amazing accomplishment,” he said.

Given the difficulties, Mazur said lawmakers should seek bipartisan collaboration, ideally. It might take longer to pass a bipartisan tax bill, but it would be more likely to make significant, long-lasting changes.

“If you want to make the tax system fairer, more efficient, simpler, and you want it to stick for a long time, then doing it in a bipartisan way seems to be a better approach,” he said.

A key part of the House GOP plan, a “border adjustment” that would tax imports and exempt exports, is facing a lot of pushback from retailers and some conservative groups and lawmakers. 

Mazur called the provision “an elegant answer to a public finance question” of how to design a business tax that limits some of the current international tax issues. But he added that it’s unclear exactly how it would work until all the details are known, and it’s hard to see how the proposal could be enacted, given opposition from Republican senators.

Mazur also expressed some concerns about proposals, including one in the House blueprint, to shift the U.S. to a “territorial” system that doesn’t tax American companies’ foreign earnings.

Mazur said that if the tax rate on domestic earnings were much higher than that on foreign earnings, there would need to be policing of companies engaging in aggressive tax planning, trying to take advantage of the rate differences. A better alternative, he said, would be to do something like what former President Obama proposed, which was to reduce the gap between the tax rates on earnings within the United States and earnings for a foreign subsidiary.

Mazur said that tax reform is a process that needs to involve back-and-forth between elected officials and the career staff in Congress and the Treasury Department. Additionally, it’s important for the administration to have “pretty clear roles as to who is driving the policy process,” he said.

He said that he learned from his time at Treasury that “long-term fiscal implications are quite important,” stressing the fact that debt levels are projected to be unsustainable in several decades. 

Trump on Friday signed an executive order that directs the Treasury to review tax regulations issued last year. 

Among the rules likely to be scrutinized will be guidance Treasury issued to limit the tax benefits of corporate “inversions” — transactions in which U.S. companies reincorporate overseas after merging with foreign companies in order to lower their taxes. Those regulations received some criticism from Republican lawmakers and business groups. 

Mazur said that the Obama White House knew those rules were “suboptimal,” since the best way to stop inversions is to make changes to the business tax system. But the administration took action to try to prevent the corporate tax base from eroding so much that business tax reform would be pointless later on.

“[What] we tried to do was preserve the corporate tax base in a fairly principled way,” he said.

A native of New Jersey with a Ph.D. from Stanford University, Mazur worked in the federal government for about 27 years before joining TPC.

He held positions at the Joint Committee on Taxation, National Economic Council, Council of Economic Advisers, Department of Energy and IRS before joining Treasury in 2009 as deputy assistant secretary for tax analysis. He was confirmed as assistant secretary for tax policy in 2012.

Last summer, Mazur was asked if he would be interested in becoming TPC’s director. He decided the job seemed to be a good fit.

“I know a lot of the people who work at Tax Policy Center. They do very high-quality work,” he said. “They do work in a nonpartisan way, which I think is important to me that there’s no obvious political bent to what goes on here.”

Mazur said that his first goal as TPC director is to “do no harm” and maintain the think tank’s reputation for high-quality analysis. Other goals include expanding TPC’s portfolio and finding ways to communicate more broadly to the public.

TPC will continue to produce analyses of tax proposals floated by politicians, as it did last year for the House GOP plan and proposals from presidential candidates.

“That’s the bread and butter work that we do,” he said. 

TPC is generally viewed as centrist but was accused of having a liberal bias by Peter Navarro, now the head of Trump’s National Trade Council, during an event in October.

Mazur said that people shouldn’t view TPC as more liberal just because its latest director has experience working in the Obama and Clinton administrations.

“Part of what I try to do is view things kind of down the middle more than through a partisan lens,” he said.

Mazur, 60, is married and has two children. In his free time, he likes to go hiking and hear live music, regularly attending concerts at the 9:30 Club in D.C.

Those who’ve worked with Mazur praised his deep knowledge of tax issues.

“He has an excellent command of tax policy data and how the pieces of the code fit together,” said Mark Prater, deputy staff director and chief tax counsel to Senate Finance Committee Republicans. 

Lily Batchelder, a professor at New York University who previously worked for Senate Finance Committee Democrats, said that Mazur “is brilliant and someone who is incredibly dedicated to presenting data fairly and estimating things as accurately as possible.”