Trump’s Win Could Spur Tax Reform
Tax proposals favored by President-Elect Donald Trump on the campaign trail align with the tax blueprint released by the GOP earlier this year. Because of this, House Republicans say tax reform will be near the top of their 2017 legislative agenda.
Following President-elect Donald Trump’s win on November 8, House Republicans said last week that tax reform will be near the top of their legislative agenda for 2017.
A tax code overhaul is much more probable after Trump’s win, because the tax blueprint released earlier this year by GOP tax writers [PDF] is very close to the tax proposals favored by Trump on the campaign trail. On November 9, House Ways and Means Committee Chairman Kevin Brady (R-TX) that he is excited about working with the Trump administration to lower the individual and corporate tax rates and reduce the incentives for U.S.-based companies to keep their profits overseas.
“We’re ready,” Brady said on CNBC. “It’s exciting for those of us who are absolutely confident the U.S. economy can grow much faster and be much healthier than what we have today… It’s really important that we redesign the way we tax so our companies can compete and win anywhere in the world, especially here at home. We want to make sure we eliminate every tax incentive to move U.S. jobs or headquarters or research overseas.”
The GOP tax blueprint is based on Republican goals to lower rates for individuals and corporations and move to a business consumption tax instead of an income tax-based system. The plan would lower top rates to 20 percent for corporations and 33 percent for individuals. It would also lower rates for small businesses organized as pass-through entities to 25 percent.
Given Republicans’ narrow majority in the Senate, they are discussing the possibility of using reconciliation to limit Senate Democrats’ ability to block a GOP tax reform bill from passage.
Some Senate Democrats, including Sen. Charles Schumer (D-NY), have been in talks with their Republican counterparts about possibly funding infrastructure upgrades through a reduced tax on repatriation. The tax break would give multinational corporations a one-time tax break on money earned in foreign countries. Republican leaders will likely see whether there is opportunity for bipartisanship on tax reform, while keeping reconciliation on the table as an option for getting a bill through Congress this coming year.