McCarthy calls for tax reform, not tariffs

Trump this weekend used social media to repeat his proposal to impose a 35 percent tariff on the products made by U.S. companies who leave the country.

McCarthy wouldn’t say whether he backs such a proposal, and instead focused on tax reform.

“The point the president-elect was trying to make is you want to create jobs in America,” McCarthy said Monday in a meeting with reporters in his Capitol Hill office. “The best way to do that is through tax reform.”

He added, “You won’t need to have that other discussion.”

Trump issued a string of tweets over the weekend following his deal with Carrier in Indiana, which exchanged tax breaks for the preservation of hundreds of jobs.

“The U.S. is going to substantially reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. without retribution or consequence, is WRONG!” Trump tweeted. “There will be a tax on our soon to be strong border of 35% for these companies …”

“We are going to have tax reform,” McCarthy said when pressed on whether he rejected the tariff proposal. He said lowering the corporate tax rate would make it more attractive for U.S companies to remain in the country and repatriate to United States.

“I think that is a better way of solving the problem than getting into a trade war with a 35 percent tariff,” McCarthy said. “I believe tax reform is going to happen. Let’s have the debate and see where it ends up.”

“I do not believe in a trade war, I do not believe trade wars are healthy,” he added. “But we are currently at a disadvantage based on the tax code we have, for countries to be able to stay in America. Those are the ways to solve more jobs in America and we don’t get into a trade war.”