Healthcare debate may stall things.
Tax reform has been at the forefront of GOP policy issues in Washington. Under the Trump administration, tax reform includes a proposed border adjustment tax or tariff. Treasury Secretary Steven Mnuchin and the White House want tax reform legislation in the works by August, but Senate Majority Leader Mitch McConnell (R-KY) said an August timeframe is unlikely:
“I think finishing on tax reform will take longer. But we do have to finish the health-care debate, up or down, win or lose, before we go to taxes,” McConnell told Politico.
Press Secretary Sean Spicer said the White House wants tax reform to happen this summer:
“Tax reform remains high on the president’s priority list,” Spicer said, noting that he expects Congress to remain “on schedule” when it comes to President Trump’s major legislative goals.
“I think we feel confident that we’re going to get a lot done, continue to get a lot done this year,” Spicer said Thursday.
President Donald Trump wants Congress to concentrate on healthcare before they touch tax reform. The House GOP released an Obamacare revision last week, but a lot of conservatives have not embraced it.
I doubt many will embrace the border adjustment tax plan, either. Last month, I blogged about how the border adjustment tax remained on life support, especially since Congress does not have a Plan B. The suggested plan has faced backlash from top retailers and other businesses.
The border adjustment is a tariff. It adds a tax on imports, which will inevitably raise prices on consumers. Common sense economics: a business must make a profit in order to supply goods and services. It cannot do that without money. In order to make money when a tax is added or raised, the business must raise the price of its goods to make that profit.
Speaker Paul Ryan (R-WI) tried to push the border tax on Senate Republicans, but Sen. Tom Cotton (R-AK) slammed it on the Senate floor. Sources said that Sen. Orrin Hatch (R-UT) told Trump and Ryan the tax plan will not receive the support it needs in the Senate.
But the tax debate includes much more than the border adjustment tax. On March 1, Mnuchin appeared on Fox Business to assure people that most deductions will not be on the chopping block:
“Let me first clarify, we are not taking away the charitable deduction and we are leaving the mortgage interest deduction as is,” Mnuchin said in an interview on Fox Business Network.
“We think those are both very, very important. But what we are going to do is we are looking at other things where the reduction in deductions will offset the rate,” he said.