With healthcare bill dead, Republicans
turn to taxes
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[March 25, 2017]
By David Morgan
WASHINGTON (Reuters) - After failing to
repeal Obamacare, Republicans in the U.S. Congress quickly pivoted on
Friday to President Donald Trump's next priority: overhauling the
federal tax code, but their plan has already split the business
Division among Republicans was the chief cause of the embarrassing
setback on Obamacare, and similar fault lines have been evident for
months in the Republicans' tax plan, mainly over an untested proposal to
use the tax code to boost exports.
House of Representatives tax committee Chairman Kevin Brady conceded the
demise of a Republican plan to roll back Obamacare could make the path
to tax reform harder. "This made a big challenge more challenging. But
it’s not insurmountable," he told Fox News after Ryan canceled a vote on
an Obamacare rollback bill.
But Brady said he and House Speaker Paul Ryan are all-in on tax reform.
Brady said House Republicans plan to begin moving on tax reform this
spring and to pass legislation before Congress's summer recess in late
"We’re going to work with the administration to get this done,” he said.
Trump has been unclear about his position on the most problematic
feature of the House Republicans' tax "blueprint," a proposal known as
the border adjustment tax that would cut taxes on exports and raise them
Treasury Secretary Steven Mnuchin said on Friday that tax reform in many
ways is "a lot simpler" than healthcare reform.
"We're able to take the tax code and redesign things and I think there
is very, very strong support," Mnuchin said at an event hosted by news
Comprehensive tax reform is a policy goal so complex that it has defied
successive Congresses and presidents since 1986 when it was last
accomplished under former President Ronald Reagan.
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House Ways and Means Committee Chairman Kevin Brady (R-TX) speaks
with the media on Capitol Hill in Washington, D.C., U.S., March 14,
2017. REUTERS/Aaron P. Bernstein
The U.S. tax code is riddled with narrow subsidies and loopholes,
many of them deeply embedded in the economy and defended by the
interests they benefit, such as the mortgage interest deduction and
the business interest deductibility.
Brady's panel has been working on a plan since mid-2016 that would
cut the corporate tax rate to 20 percent from 35 percent, end taxing
foreign profits for U.S.-based multinationals and cut other tax
rates for businesses and investors.
The plan has divided businesses, prompting import-dependent
industries to warn of higher prices for consumer goods from clothing
and electronics to gasoline.
Brady has been adamant that border adjustment will be part of the
House tax reform, saying earlier this week that the provision was "a
given" for final legislation but would include a transition period
for import-heavy industries.
(Additional reporting by Eric Walsh and David Lawder; Editing by
Kevin Drawbaugh and Bernard Orr)
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