Rep. Kevin Brady (R-TX) said the House Republicans hope to change the tax code without raising the deficits:
“We designed our blueprint to break even within the budget, considering that economic growth,” Rep. Kevin Brady (R., Texas), chairman of the House Ways and Means Committee, said at The Wall Street Journal’s CEO Council. If there are some deficits, he said he would accept them if the result was stronger growth.
They started working on a plan earlier this year and will make a tax overhaul a priority in 2017.
The Wall Street Journal reported:
The House plan would lower individual and corporate tax rates, limit some tax breaks and change the way the U.S. taxes multinational companies’ foreign operations.The plan will be analyzed using what is known as dynamic scoring, under rules changed by Republicans when they took control of Congress. Dynamic scoring for tax cuts assumes that policy changes can spur economic growth and thus cover some of their own costs by creating new tax revenue.The plan will be analyzed using what is known as dynamic scoring, under rules changed by Republicans when they took control of Congress. Dynamic scoring for tax cuts assumes that policy changes can spur economic growth and thus cover some of their own costs by creating new tax revenue.
Without “long-run deficits” the plan has a good opportunity to “avoid a Senate filibuster and forbid increasing future deficits.” However, Brady also said they would accept any increase in deficits “if accepted by stronger growth.”
Brady told the group that “his plan would reduce government revenue in the early years but then generate economic growth and revenue after that.”
The Wall Street Journal also noted the differences between President-elect Donald Trump’s plan and the House Republican plan:
Mr. Trump’s plan features a 15% corporate tax rate, while the House plan sets it at 20%. Both are big cuts from today’s 35% rate.Mr. Trump’s plan would lose at least $4 trillion in revenue over a decade without accounting for economic growth. Even his campaign didn’t suggest that the tax cuts alone would pay for themselves.Mr. Brady said he thought gaps between the proposed rates could be bridged.“Yes, I think we can find common ground on the rate, but I don’t think the rate’s enough,” Mr. Brady said, pointing to changes on capital expensing and international tax policies that he says would encourage economic growth.
But the plan faces opposition from both parties in the Senate. The GOP in the upper house have not agreed to either plan and may “alter it as the tax rewrite moves through the legislative process.”
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