GOP Congress Looks to Rebound With Tax Reform

Congressional Republicans are looking to rebound following the Senate’s failure to pass legislation repealing and replacing Obamacare by moving on to what some consider to be the holy grail of the GOP platform: tax reform.

A joint statement released Thursday by House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steve Mnuchin, National Economic Council Chairman Gary Cohn, and the chairmen of Congress’ committees responsible for tax policy outlined the consensus reached by GOP lawmakers and the White House:

"The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas. And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base.”

The statement ruled out the creation of a border adjustment tax that would have imposed taxes on goods imported to the U.S. that are consumed in the country. The idea had proven controversial, which would likely have caused prices on imported products to increase for American consumers.

Republicans plan to develop the tax reform package through regular order with committees in both chambers of Congress drafting the bill — a departure from the process used to craft the failed healthcare legislation that will be welcomed by many lawmakers on both sides of the aisle.

Speaker Ryan expects the process to be completed by the end of 2017, but with the House departing for its August recess today the debate won’t start in earnest until lawmakers return in September. Until then, most of committee members’ work will be done behind the scenes, but you can look forward to some contentious tax policy hearings in Congress this fall.

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— Eric Revell

(Photo Credit: Gage Skidmore via Flickr / Creative Commons)