03/30/2017

Trump, GOP Moving on to Tax Reform

Following its healthcare failure, the White House is pushing for fast-paced tax reform

Eager for a legislative win after a failed attempt to replace Obamacare last week, the White House wants an accelerated timeline for tax reform and is vowing to take the lead in developing a plan.

President Donald Trump is being briefed today on various options for enacting comprehensive changes to the tax code. One of those options is reportedly the GOP tax reform blueprint endorsed by Speaker Paul Ryan (R-WI) and House Ways and Means Committee Chairman Kevin Brady (R-TX) that includes a border-adjusted tax on imports. This tax has been controversial so far - with some lawmakers fearing it would be bad for retailers and other businesses.

Trump is also expected to be briefed on details of a 2014 discussion draft that was released by former Ways and Means Chairman Dave Camp (R-MI). Camp had proposed lowering the corporate tax rate to 25 percent while eliminating certain tax credits and deductions to keep the plan revenue-neutral.

This week, White House Press Secretary Sean Spicer said that the administration has “talked about August as a target date” to have a bill ready to move; he added that the White House will be “driving the train” on putting together the plan.

Trump is reportedly considering advancing tax reform and an infrastructure package simultaneously, though not necessarily in the same bill. Infrastructure spending could be an issue that appeals to both Republicans and Democrats, though there are differences to work out in terms of how to pay for transportation upgrades.

A fallback plan if none of these proposals garners enough support is to enact temporary tax cuts similar to what Congress did early in President George W. Bush’s administration that would expire after 10 years unless extended.

Brady told reporters this week that Congress has an opportunity to radically and permanently overhaul the tax code and shouldn’t settle for a temporary fix.

“If we’re serious about leapfrogging America back to the lead of the pack, and if we’re serious about creating jobs and jump-starting this economy, a 10-year bill will not accomplish either of those,” Brady said. “The most pro-growth tax reform is permanent tax reform so I’m operating on that basis.”

This article was provided to OSAE by The Power of A.