(Repeats for wider distribution)
By David Morgan
WASHINGTON, March 24 After failing to repeal
Obamacare, Republicans in the U.S. Congress quickly pivoted on
Friday to President Donald Trump's next priority: overhauling
the federal tax code, but their plan has already split the
Division among Republicans was the chief cause of the
embarrassing setback on Obamacare, and similar fault lines have
been evident for months in the Republicans' tax plan, mainly
over an untested proposal to use the tax code to boost exports.
House of Representatives tax committee Chairman Kevin Brady
conceded the demise of a Republican plan to roll back Obamacare
could make the path to tax reform harder. "This made a big
challenge more challenging. But it’s not insurmountable," he
told Fox News after Ryan cancelled a vote on an Obamacare
But Brady said he and House Speaker Paul Ryan are all-in on
Brady said House Republicans plan to begin moving on tax
reform this spring and to pass legislation before Congress's
summer recess in late July.
"We’re going to work with the administration to get this
done,” he said.
Trump has been unclear about his position on the most
problematic feature of the House Republicans' tax "blueprint," a
proposal known as the border adjustment tax that would cut taxes
on exports and raise them on imports.
Treasury Secretary Steven Mnuchin said on Friday that tax
reform in many ways is "a lot simpler" than healthcare reform.
"We're able to take the tax code and redesign things and I
think there is very, very strong support," Mnuchin said at an
event hosted by news website Axios.
Comprehensive tax reform is a policy goal so complex that it
has defied successive Congresses and presidents since 1986 when
it was last accomplished under former President Ronald Reagan.
The U.S. tax code is riddled with narrow subsidies and
loopholes, many of them deeply embedded in the economy and
defended by the interests they benefit, such as the mortgage
interest deduction and the business interest deductibility.
Brady's panel has been working on a plan since mid-2016 that
would cut the corporate tax rate to 20 percent from 35 percent,
end taxing foreign profits for U.S.-based multinationals and cut
other tax rates for businesses and investors.
The plan has divided businesses, prompting import-dependent
industries to warn of higher prices for consumer goods from
clothing and electronics to gasoline.
Brady has been adamant that border adjustment will be part
of the House tax reform, saying earlier this week that the
provision was "a given" for final legislation but would include
a transition period for import-heavy industries.
(Additional reporting by Eric Walsh and David Lawder; Editing
by Kevin Drawbaugh and Bernard Orr)