President Trump’s address to Congress Tuesday night only intensified speculation about his stance on tax reform, as it left tax policy insiders wondering whether he supports the House Republican plan to adjust taxes at the border.
In ambiguous comments on taxes Tuesday night, Trump appeared to embrace some of House Republicans’ rhetoric in favor of their controversial border-adjusted tax proposal, although his remarks were also applicable to trade policy.
On Wednesday morning, the lawmaker in charge of shepherding the plan through Congress claimed that Trump and House Republicans are united.
Speaking on CNBC, House Ways and Means Committee chairman Kevin Brady said that Trump sounded “on the same page” as Republicans in “leveling the playing field for ‘made in America’ products here and abroad” through a border-adjusted tax. “We’re headed in exactly the same direction,” he added.
Later in the interview, the Texas Republican projected confidence, saying that, “at the end of the day, we’re going to have border adjustment in the full tax reform.”
Yet congressional Republicans’ top critic of the border adjustment feature, Georgia senator David Perdue, disagreed with the idea that Trump signaled support for the plan. “I didn’t read it that way at all,” Perdue said during a brief interview at the Capitol.
Instead, Perdue explained, Trump was combining points about tax reform and trade in his comments about leveling the playing field.
“If you add to the tax question the conversation about trade, then you get to an issue where you can have a more level playing field,” Perdue said.
Asked for more context on the point of Trump’s comments Wednesday morning, a White House spokesperson responded that president’s remarks would speak for themselves.
Interviewed Tuesday night by Reuters, Commerce Secretary Wilbur Ross said that Trump did not mean to endorse the House GOP plan with his comments. “I didn’t hear him coming out clearly in favor of any one system,” Ross said.
Ross is said to be one of the administration’s critics of the Brady-backed plan. Other White House insiders, including adviser Steven Bannon, are reported to favor the idea.
House Republicans have proposed taxing imports as part of a broader corporate rate-cutting reform that would tax goods based on where they are sold. Under the plan, companies would no longer be allowed to deduct the cost of imported goods and services, but would no longer pay any taxes on revenues from exports. In today’s system, U.S. companies are taxed on all profits, whether they are earned in the U.S. or abroad. House leadership says that the change would encourage more manufacturing within the U.S., and discourage companies from moving production overseas.
Yet several Republican senators, including Perdue, have expressed skepticism about the policy, amid strong opposition from retailers and other importers. With little margin for error in the upper chamber, White House support for or opposition to the provision could determine its fate.
As a result, lawmakers have been left to speculate about Trump’s stance.
Speaking on CNBC Wednesday, commentator Larry Kudlow, a sometime outside adviser to Trump’s campaign, asserted that “inside the White House, the BAT is winning,” referring to the border-adjusted tax.
Brady also said Wednesday morning that when the measure is spelled out in legislation, “there will be improvements in that from the original position,” reflecting input from industries concerned about higher import prices.
