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Increasing font-size causes ripple focus state to crop
If you bump the font-size of your paper-icon up to something around 20px it'll crop the keyboard focus state.

This happened to me when I set font-size at the :host level and it cascaded down to the child. You can work around it by setting font-size to something like 15px but that's non-intuitive and kinda wonky.
Here's a jsbin: http://jsbin.com/geqoke/edit?html,output
Any news on this?