US House weighs alternatives to border tax
Washington, 18 May (Argus) — Republican leaders in the US House of Representatives are sticking to their goal of overhauling the tax code this year, even as they consider replacing what had been the main pillar of their plan.
Another complication: near-daily controversies surrounding the White House and possible links between President Donald Trump's campaign and Russia.
House speaker Paul Ryan (R-Wisconsin) said that neither challenge was insurmountable. The caucus is "making good progress" on efforts to enact a comprehensive tax changes by the end of 2017, Ryan said.
Republican lawmakers, for example, are considering alternatives to a border adjustment tax that few expect could pass in the US Senate.
"If you are not going to do border adjustment, then you have to look at alternatives to that," Ryan said today. "There are always upsides and downsides to alternatives. That is the process we are going through right now."
The border tax is a main feature of Ryan's tax plan and would help pay for lower tax rates. It is projected to generate about $1 trillion over the next decade by taxing US corporations on imports and domestic sales, while removing taxes on exports. But refiners, energy companies and retailers oppose the tax, which they say will raise the price of consumer goods. US Senate majority leader Mitch McConnell (R-Kentucky) this week conceded it was unlikely to pass in the upper chamber.
It is unclear what alternatives are being considered. Finding a politically viable replacement that generates similar revenue would be a heavy lift. Some conservatives are pushing Republicans to give up on a revenue-neutral tax overhaul, which would be permanent, and instead seek unpaid-for tax cuts that would sunset within 10 years.
Settling on the right policy is not the only challenge facing Republicans in Congress.
Their legislative agenda also faces growing headwinds because of controversy surrounding President Donald Trump's decision to fire his FBI director James Comey, who was leading an investigation into his presidential campaign's interactions with Russia. The US Justice Department yesterday named former FBI director Robert Mueller to oversee that investigation.
Ryan today dismissed the idea that controversies at the White House would derail his agenda and said he was "confident" Republicans could achieve the tax overhaul this year. His comments came as the US House Ways and Means Committee, where tax legislative will originate, was holding its first hearing on their tax plan.
"We can walk and chew gum at the same time," Ryan said today. "And sure, drama is not helpful in getting things done, but we are still getting things done."
Tax experts say the chances of a tax overhaul happening this year are slim, particularly since Republicans are trying to first enact a sweeping healthcare law. But the non-profit group the Committee for a Responsible Federal Budget's president Maya MacGuineas said tax cuts were still possible.
"If it is just tax cuts, it could get through this year," she said yesterday. "Not tax reform."