White House pushes ‘ag­gres­sive’ time­line for tax cut

Com­pro­mises eyed to get plan in place by fall

The Washington Times Weekly - - Politics - BY DAVID SHERFINSKI

The White House sig­naled that President Trump would rather have a big tax cut that in­creases eco­nomic growth — even if it means hav­ing to ac­cept tem­po­rary changes that would ex­pire after a decade.

“We are most in­ter­ested in mak­ing sure the econ­omy is grow­ing,” Marc Short, the White House’s chief leg­isla­tive li­ai­son, told re­porters after a tax event at the New­seum.

Mr. Short also laid out an “ag­gres­sive” timetable for con­gres­sional ac­tion, say­ing he an­tic­i­pated that leg­is­la­tion would be mov­ing through the House in Oc­to­ber and the Se­nate in Novem­ber.

“So that, I think, is an ag­gres­sive sched­ule, but that is our timetable,” Mr. Short said dur­ing the event.

Con­gres­sional Repub­li­cans have said they want to pass com­pre­hen­sive tax re­form in 2017, but Mr. Short’s pro­posed time frame now gives them in­for­mal bench­marks to hit — or blow through.

As they move on from a failed push to over­turn Oba­macare to an over­haul of the tax code, Repub­li­cans are in­creas­ingly trapped by the bud­get math, with their de­sire for big across-the-board tax rate cuts con­strained by law­mak­ers’ in­abil­ity to pay for them.

Some deficit hawks are say­ing a bal­anced pack­age that doesn’t increase the gov­ern­ment’s debt is the most im­por­tant fac­tor, but the White House is less fo­cused on that. Mr. Trump’s top aides have been hes­i­tant to out­line spe­cific poli­cies, afraid of an­ger­ing im­por­tant con­stituen­cies early in the de­bate.

That’s what hap­pened to House GOP lead­ers, who floated the idea of a bor­der ad­just­ment tax that would have been slapped on im­ports. Repub­li­cans said the ad­di­tional rev­enue could be pumped back into the bud­get, cre­at­ing space for ma­jor tax rate cuts.

But re­tail­ers and im­porters mounted a ma­jor pub­lic re­la­tions of­fen­sive and made the bor­der tax idea poi­sonous, forc­ing House Speaker Paul D. Ryan and Ways and Means Com­mit­tee Chair­man Kevin Brady to nix the idea last week.

Repub­li­cans have said they’ll try to cut other loop­holes and de­duc­tions in or­der to find money to lower rates, but even there they’ve al­ready taken off the ta­ble two of the big­gest de­duc­tions — mort­gage in­ter­est and char­i­ta­ble giv­ing.

House GOP lead­ers have pro­posed ax­ing the de­duc­tion for state and lo­cal in­come taxes paid, but have run into op­po­si­tion from Repub­li­cans from high­er­tax blue states such as New York and New Jersey.

Mr. Short said that carve-outs for re­tire­ment in­come are also part of the con­ver­sa­tion, though the White House said ear­lier this year that re­tire­ment sav­ings would be pro­tected un­der their plan.

Mr. Short also said that President Trump will con­tinue to push for a 15 per­cent cor­po­rate tax rate, down from the cur­rent level of 35 per­cent. The lower rate would also ap­ply to small busi­nesses cur­rently taxed as in­di­vid­u­als, which of­ten face a top rate of close to 50 per­cent.

But Se­nate Fi­nance Com­mit­tee Chair­man Or­rin G. Hatch, a key tax-writer, told Reuters that Mr. Trump’s 15 per­cent rate is “very un­likely” and that it would be “kind of mirac­u­lous” to get the rate down to even 25 per­cent or less.

The Joint Com­mit­tee on Tax­a­tion has es­ti­mated that a 1 per­cent across-the­board increase in the cor­po­rate tax rate alone trans­lates to about $100 bil­lion in rev­enue over a 10-year pe­riod.

Mr. Short ruled out rais­ing any­one’s tax rates.

“Rais­ing taxes is not a for­mula for growth, so I don’t think that you will see us look­ing to raise rates on any par­tic­u­lar in­di­vid­ual or level,” he told re­porters.

Un­der fast-track bud­get rules Repub­li­cans plan to use, they must make a choice: If their re­forms are to be per­ma­nent, they can­not add to the deficit over the next decade. If they do add to the deficit, they must ex­pire at the end of 10 years.

A joint state­ment last week from House, Se­nate and White House lead­ers called for a plan that places a “pri­or­ity” on per­ma­nence, leav­ing them a bit of wig­gle room they could very well need as the costs of what they want to do add up.

Mr. Short, along with Trea­sury Sec­re­tary Steven T. Mnuchin, had ap­peared at an event hosted by Amer­i­cans for Pros­per­ity and Free­dom Part­ners, two ad­vo­cacy groups that are part of the Koch broth­ers’ po­lit­i­cal net­work.

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