Senate aims to complete tax reform plans by August
Lawmakers hope to reach “critical mass” in support for a tax overhaul by August, but still have a number of political and procedural hurdles to overcome before then, a top Senate Finance Committee staffer said Tuesday.
As Congress plots its agenda for the rest of this year, the chief tax counsel for Republicans on the Senate Finance Committee said they are still aiming for quick action, but even if the timetable slips, he still thinks it could get done by 2018 — ahead of congressional elections.
The White House is pushing for speedy action, saying tax cuts are needed to spur the economy now, but Capitol Hill appears to be bracing for a longer time frame.
Mark Prater, a top aide to Finance Committee Chairman Sen. Orrin G. Hatch, said the plans are in “flux.”
“I will say that on something as complicated as tax reform, it’s very hard to probably complete that by the end of a traditional congressional session,” Mr. Prater said at a conference in Washington hosted by the Organization for Economic Cooperation and Development (OECD).
A major tax overhaul is a unifying goal for both the White House and congressional Republicans, who are looking for accomplishments they can take to voters next year.
Republicans had tried to interest former President Barack Obama, but they couldn’t agree on the goals, and the effort foundered. Now it’s been revived, but the White House and Capitol Hill appear to be differing on strategy.
President Trump, meeting with congressional Republican leaders, said Tuesday that he would enact the biggest tax cut in history “if it’s passed the way we’d like to have it passed.”
“It will spur business like never before,” he said. Mr. Trump’s blueprint generally tracks a House GOP plan in cutting personal income tax rates, though the president wants a deeper cut in the corporate tax, from 35 percent to 15 percent. The House plan calls for a 20 percent tax.
House leaders have said they want to pass a tax package in 2017, and Ways and Means Committee Chairman Rep. Kevin Brady said Tuesday they’re “laser focused” on getting it done this year.
“The Trump team feels the same way, and the Senate as well,” Mr. Brady said on Fox News.
Senate Majority Leader Mitch McConnell, however, said recently he would want to try to finish it “this Congress,” setting a much longer ceiling for action.
Mr. Prater said if things do slip, election-year action is at least possible. He pointed to a tax law repealing an export provision that was debated during the height of the 2004 political campaigns and ultimately signed by President George W. Bush in October of that year.
He said a broader overhaul, though, could be a heavier lift.
“The political marketplace will test kind of how aggressive the members want to be” on the broad goals of cutting rates and broadening the tax base, Mr. Prater said.
In addition to desired changes on the individual and business side, Mr. Prater also said there would be “serious” consequences if policymakers don’t address international tax issues.
“The system encourages firms to earn income outside the U.S. [and] discourages firms from bringing earnings back to the U.S.,” he said.