Tax Reform Is Coming

Speaker Paul Ryan laid out his tax reform agenda at the National Association of Manufacturer’s summit.

Unlike many of his Republican colleagues who are feeling more complacent with a temporary fix, the Speaker made it clear he wants a real, permanent solution to the burdensome tax policy that plagues our country’s growth:

“These reforms — these tax cuts — they need to be permanent,” Ryan stated at the annual policy summit on Tuesday. “Every expert agrees that temporary reforms will only have a negligible impact on wages and economic growth.”

“We think this is eminently doable, to get it done by the end of the calendar year,” he later said in a question-and-answer forum following his speech. “… So that come the first of [2018] we have a new system in place and everybody knows the rules of the road.”

Ryan wants permanent tax reform – not a temporary tax cut. The Speaker has been a proponent of this for quite some time. While chairing the House Ways and Means Committee, he lead the production of tax reform blue prints that now serve as the foundation for early GOP talks. There are still questions as to what exactly the GOP bill would entail. House members are not just divided on whether reform should be permanent, but if it should include the House border adjustment tax – legislation to allow exports to be tax free.

Republicans control Congress. What is the hold up in negotiations?

From day one, GOP leaders wanted to focus on healthcare reform before touching taxes. Now that the AHCA has moved to the Senate, Ryan wants to dive head first into tax policy. However, a growing chorus of House Republicans and White House officials are becoming skittish at expansive changes and are leaning toward simple tax cuts.

Whatever route they choose, they are hoping to tackle the issue sooner rather than later. Many congressional Republicans wish to cancel August recess in order to work longer.

Tax reform would be a big win for the GOP. This is why they must strive high and look towards expansive, long term reform.

Unlike more hot-button issues such as the American Health Care Act or massive infrastructure spending, tax reform is popular among Republican voters and the American electorate as a whole. Most agree that our tax code is too complex and burdensome on our families and businesses. Ryan touched on this in his speech when he referred to America’s 35 percent corporate tax rate – compare this to Canada’s rate of 15 percent.

Not only is tax reform popular among the Republican “establishment,” it is something that perfectly coincides with Trump’s America First agenda. A border adjustment tax would incentive companies to stay on American shores. More American-made products mean more American manufacturers.

President Trump has done well with his use of the pen and executive orders. However, the GOP controls all the levers of Washington and they need to show something for it at the legislative level. Healthcare reform is moving slowly and looking unlikely to pass the Senate. A tax bill that cuts rates and simplifies the system would undoubtedly be popular among the majority of lawmakers.

The GOP needs a win and that win should be tax reform.

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