Tax Overhaul Becomes GOP's Priority as Health-Care StallsBy
Trump says next move is on tax code, ‘which I’ve always liked’
Ryan acknowledges health bill failure makes taxes difficult
President Donald Trump and House Speaker Paul Ryan say they’re ready to put a tax overhaul at the top of their agendas.
After the lack of sufficient support among House Republicans forced them to cancel a scheduled vote on a bill to repeal and replace Obamacare, both men highlighted the need to focus now on rewriting the U.S. tax code.
“So now we’re going to go for tax reform, which I’ve always liked,” Trump said Friday following the decision to cancel the vote. Health care represented the first big test of Trump’s ability to steer ambitious proposals through Congress -- yet some experts say he’s seemed more interested in tax issues throughout his comparatively brief political career.
“Tax reform has always been a bigger priority for the administration than health-care reform -- when they were in campaign mode, tax reform was their big thing,” said economist Kyle Pomerleau, the director of federal tax projects at the conservative Tax Foundation.
During a rally earlier this week, Trump repeated a theme from recent speeches, calling for “massive tax reform” -- though details of the plan he’ll offer remain unclear.
During a press conference Friday, Ryan acknowledged that failing to repeal and replace Obamacare would make a tax overhaul more difficult, but not impossible, because his members have more consensus on taxes. He said he met with the president, as well as Treasury Secretary Steven Mnuchin, on Friday to discuss a tax overhaul.
“Now we’re going to move on with the rest of our agenda because we have big, ambitious plans to improve people’s lives in this country,” Ryan said.
Trump’s tax proposals changed throughout his presidential campaign -- by Election Day, his plan had moved closer to the tax blueprint that Ryan and other House leaders prefer. Both plans would consolidate the number of individual income-tax rates to three from the existing seven; the top rate would drop to 33 percent from 39.6 percent currently.
On corporate taxes, Trump and Ryan have yet to forge an agreement -- particularly on the controversial issue of “border adjustments.” Ryan favors replacing the existing 35 percent corporate income tax with a 20 percent tax rate on companies’ domestic sales and imports. Exports would be excluded.
That border-adjusted approach -- which opponents say would increase consumer prices -- has divided Trump’s White House advisers, and the president hasn’t yet announced a position on it. Supporters say higher prices on imported goods would be offset over time by a strengthening dollar.
“One of our concerns about it is that if the currency moves, then the Wal-Mart shopper shouldn’t be impacted," Mnuchin said during a Friday morning appearance at an event sponsored by the media company Axios. "But if the currency moves, that has an impact for our exporters. It’s a very complicated issue worth looking at carefully.”
Mnuchin said the White House is committed to a tax overhaul that includes corporate and individual tax cuts. He added that the administration had been working on a tax plan for the past two months and it’s something “we are designing from scratch and running through a lot of scenarios.”
Mnuchin has previously said tax legislation would be completed by Congress’s August recess. On Friday, he said he’s still optimistic about the August target but signaled a tax overhaul by the fall might be more likely.
White House Budget Director Mick Mulvaney also said Friday the White House will be taking the lead on pushing the tax overhaul -- and that the president is working on that plan now.
“When you see tax reform the first time, it will be the president’s plan and we’ll drive the debate on that,” Mulvaney said during an interview on ABC’s “Good Morning America.”
Kevin Brady, chairman of the tax-writing House Ways and Means Committee, said he remains committed to getting a tax overhaul completed before Congress’s recess in August and that he still wants to use the House GOP plan to achieve a meaningful corporate rate reduction.
“We’re going to head straight into the next game, which is the biggest tax reform in modern history,” Brady said.
— With assistance by Anna Edgerton, Lynnley Browning, Saleha Mohsin, and Kevin Cirilli