By David Morgan
WASHINGTON (Reuters) – After failing to repeal Obamacare, Republicans in the U.S. Congress quickly turned to President Donald Trump‘s next priority on Friday: reviewing the federal tax code, but his plan has already divided the business community.
Dividence among Republicans was the main cause of the embarrassing setback at Obamacare, and similar flaws have been evident in the Republicans’ tax plan for months, mostly over an unproven proposal to use the tax code to boost exports.
House tax committee chair Kevin Brady acknowledged that the disappearance of a Republican plan to roll back Obamacare could hamper the path to tax reform. “This made a great challenge more challenging. But it is 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 committed to tax reform.
Brady said House Republicans plan to begin moving forward on tax reform this spring and passing legislation before Congress’ summer recess in late July.
“We are going to work with the administration to do this,” he said.
Trump has been unclear about his position on the most problematic feature of the House Republicans’ tax “plan,” a proposal known as the border adjustment tax that would lower taxes on exports and increase them on imports.
Treasury Secretary Steven Mnuchin said on Friday that tax reform is in many ways “much simpler” than health care reform.
“We can take the tax code and redesign things and I think there is very, very strong support,” Mnuchin said at an event organized by the Axios news website.
Comprehensive tax reform is such a complex policy goal that it has challenged successive congresses and presidents since 1986, when it was last achieved under former President Ronald Reagan.
America’s tax code is rife with tight 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 deduction.
Brady’s panel has been working on a plan since mid-2016 that would lower the corporate tax rate to 20 percent from 35 percent, stop taxing foreign earnings for US-based multinationals, and cut other tax rates for companies 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 insisted that the border adjustment will be part of the House’s tax reform, saying earlier this week that the provision was “done” for final legislation, but that it would include a transition period for import industries. heavy.
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