04/13/2017

White House Developing Tax Reform Plan

The plan is expected before August

The White House continues to stress its commitment to overhauling the tax code this year, while acknowledging it may not come together by its original target date of August.

President Donald Trump has promised a “phenomenal” tax reform plan but hasn’t said whether it will resemble the bill that House Republicans have promoted, which includes a controversial border adjustment tax that would tax imports at 20 percent. In a Fox Business interview this week, Trump said he doesn’t like the terminology being used by House tax writers.

“I don’t like the word ‘adjustment,’ because our country gets taken advantage of, to use a nice term, by every other country in the world,” Trump said. “Adjustment means we lose. Let’s call it an import tax. Let’s call it a reciprocal tax.”

In addition to being noncommittal on border adjustability, Trump has not said whether he plans to link tax reform with $1 trillion in infrastructure improvements that the administration wants to get moving on this year as well.

Meanwhile, House leaders continue to tout their own plan to rewrite the tax code, including the border adjustment tax (BAT). In an op-ed this week, House Ways and Means Committee Chairman Kevin Brady (R-TX) said the border adjustment approach will ensure that products sold in America will be taxed at a low, equal rate, regardless of where the product is made. “No more tax advantages for foreign products at the expense of American businesses and workers,” Brady said. “No more tax incentives to move jobs or manufacturing plants overseas.”

White House economic adviser Gary Cohn said the Trump administration’s tax reform plan is his top priority, though the timeline is less important than the details.

“I don’t know if it’s August or not,” Cohn said. “Getting it done well and getting it done right is more important than getting it done soon.”

This article was provided to OSAE for reprint from The Power of A.