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President-elect Donald Trump meets with U.S. House Speaker Paul Ryan, a Republican from Wisconsin. (Associated Press photo) President-elect Donald Trump meets with U.S. House Speaker Paul Ryan, a Republican from Wisconsin. (Associated Press photo)

President-elect Donald Trump meets with U.S. House Speaker Paul Ryan, a Republican from Wisconsin. (Associated Press photo)

By Cara Lombardo November 16, 2016

Is Paul Ryan right that the federal tax code has not been updated in 30 years?

Paul Ryan clearly knows his constituents.

To bring to life his ideas for tax reform, the Wisconsin congressman employed a video in which he compared the current U.S. tax code to a block of cheese.

"Right now, our tax code looks like a block of swiss cheese," he said in the video posted on his website. "It’s got all these carve-outs and loopholes, and the IRS is the one calling the shots."

Ryan has made clear he wants to drastically simplify the tax code. Consider this tweet posted on his Twitter account in late September:

"FACT: America’s tax code hasn’t been updated in 30 years. We’re past due for a #BetterWay."

With Republicans in full control in Washington, D.C., come January, many of Ryan’s ideas -- including on taxes -- may move to the front burner.

If it’s been three decades since the tax code was updated, that certainly supports his case.

Is he right?

Remodeling or repainting?

Ryan was referencing The 1986 Tax Reform Act, the second of two major tax cuts passed while Ronald Reagan was president. Enacted just over 30 years ago in October 1986, this major overhaul of the tax code took lawmakers several years to put together. They sought to simplify the tax code and redistribute the tax burden more fairly.

Changes included consolidating income levels into fewer groups and closing loopholes that allowed people to evade taxes. The law lowered the tax rate for the highest earners and corporations and raised the rate for the lowest earners while eliminating from the tax roll earners below the poverty line.

It’s true we haven’t seen a drastic overhaul of U.S. tax laws since then.

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But Ryan’s claim was the tax code hadn’t been "updated."

Since 1986, the tax code has more than doubled in size. The Tax Foundation, a nonprofit group advocating for a simplified tax code, found that the tax code grew from 30,000 pages to 70,000 pages during that time. (A previous PolitiFact item confirmed Republican U.S. Sen. Ted Cruz’s claim that the tax code is several times longer than the Bible.)

A 2013 Tax Foundation analysis found the amount of credits, loopholes and deductions in the tax code increased by 44 percent since 1986. A corresponding report authored by foundation president Scott A. Hodge detailed some of the changes:

"Over the decades, lawmakers have increasingly asked the tax code to direct all manner of social and economic objectives, such as encouraging people to buy hybrid vehicles, turn corn into gasoline, purchase health insurance, buy a home, replace that home’s windows, adopt children, put them in day care, purchase school supplies, go to college, invest in historic buildings, spend more on research and the list goes on."

In an email, Hodge said though the code grew, the 40,000 additional pages "did not change the basic structure of the 1986 system."

"It's the difference between remodeling your home and repainting," he said. "1986 remodeled the tax code, while everything since repainted it."

But Ryan’s statement could easily be understood to mean the code hasn’t been touched at all, which is clearly not the case. In fact, revisions to tax code became more frequent after 1986.

"There are updates to the tax code all the time," said Fabio Gaertner, an accounting professor at the University of Wisconsin School of Business who specializes in taxation.

Gaertner said while it’s true there hasn’t been a major overhaul in 30 years, in his view Ryan’s use of the word "updated" goes too far.

When we asked for input from the IRS, which enforces the tax code, spokesman Matthew Leas recommended we ask the Department of Treasury, which collects tax revenues through the IRS. But we didn’t hear back from either.

Our rating

Ryan said the tax code "hasn’t been updated in 30 years."

The statement hinges on how a listener interprets the word "updated." While Ryan’s camp said he meant "reformed," the statement could just as easily be understood to mean tax law hasn’t been touched at all, when there have been around 40,000 pages worth of updates, many of which are commonly-used credits and deductions.

For a statement that contains an element of truth but ignores critical facts that would give a different impression, our rating is Mostly False.

Our Sources

Tweet, Paul Ryan’s official Twitter account

Tax video, Paul Ryan’s official website, accessed November 2016

Email, Ryan press secretary Ian Martorana, November 2016

General Explanation of the Tax Reform Act of 1986, Joint Committee on Taxation, May 4, 1987

Tax Reform Act of 1986, Encyclopedia Brittancia, accessed November 2016

A lot has changed in the 27 years since the last major tax reform, The Tax Foundation, October 22, 2013

Putting a Face on America’s Tax Returns, The Tax Foundation, October 21, 2013

Email, Scott A. Hodge, Tax Foundation president, November 2016

Email, Fabio Gaertner, Wisconsin School of Business, November 2016

Tax reform turns 30, The Detroit News, October 21, 2016

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