Trump moves on
Trump pivots to a ‘simpler’ change after Obamacare shipwreck
After failing to reform the health Bill, US President Donald Trump is turning his attention towards a tax overhaul.
WASHINGTON: After a crushing defeat in efforts to repeal Obamacare, the Trump administration is hoping for smoother sailing on tax reform, expecting this will be less divisive among Republican party factions.
“Healthcare is a very, very complicated issue.
“In a way (taxes are) a lot simpler,” Treasury Secretary Steven Mnuchin said.
And Vice-President Mike Pence said lawmakers should be shown details soon.
Several days before the collapse of Republican efforts to repeal and replace the Affordable Care Act, the Obama administration’s signature healthcare law, President Donald Trump even promised to advance “the biggest tax cut since Ronald Reagan”, saying it would be “fun”.
But reshaping the entire tax code, something not done since 1986, is no mean feat. Several presidents, Republican and Democrat, have failed, foundering on procedural hurdles and the delicate compromises needed to succeed.
White House spokesman Sean Spicer said on Monday the timing of changes will depend on reaching a grand bargain.
“I think part of this is going to be dependent on the degree to which we can come to consensus on a lot of big issues,” he told reporters.
Major US stock markets have also been jittery since the Obamacare repeal started to head south, despite rallying to multiple records since Trump was elected.
“Failure to pass healthcare reform has markets questioning the viability of US President Trump’s ambitious fiscal stimulus plans,” wrote Christopher Vecchio, a currency strategist at foreign exchange trading site DailyFX.
Part of the problem is policymakers had expected revenue savings from the Obamacare repeal would partly offset planned tax cuts.
Indeed, Republican leaders insist that fiscal reforms be “revenue neutral”, that is, that they not expand the federal budget deficit.
Paul Ryan, the Republican speaker of the House of Representatives, conceded that the failure on healthcare “does make tax reform more difficult, but it does not make it impossible”.
The Trump administration first expects to cut corporate taxes in order to boost economic activity and encourage multinational companies to return to the United States and stimulate hiring.
During his campaign, Trump had promised to slash the corporate tax rate from 35% to 15%, but Mnuchin did not specifically reaffirm that commitment, mentioning only a much lower corporate tax rate. — AFP