Republicans won’t focus on simply solving the tax problems plaguing U.S. corporations, and instead focus on a broad tax overhaul that includes lowering tax rates for individuals, a top Republican said Tuesday.
“I would advise against doing that,” said House Ways and Means Chairman Kevin Brady when asked at a Wall Street Journal event about pursuing a business-only tax reform.
Instead, the Texan said, the GOP should pursue individual tax reform to simplify taxes and encourage growth, and ambitious corporate tax reform to “leapfrog” the more business-friendly regimes in Europe and elsewhere.
Brady’s comments indicate that there is little appetite for one version of tax reform, which the Obama administration and some congressional Republicans have pursued. That path would aim for business tax reform to alleviate the pressures facing U.S. companies to move their headquarters overseas, especially the high U.S. corporate tax rate and the unusual practice of imposing U.S. corporate taxes on foreign subsidiaries’ profits.
Rather, Republicans will also pursue legislation that lowers individual tax rates, raising the odds of conflict with Democrats opposed to tax cuts for high earners.
In that scenario, congressional Republicans and the incoming Trump administration could expect less cooperation from Democrats, and might have to consider using a special budget procedure that allows legislation to pass with only 51 votes in the Senate, rather than the typical 60 required to overcome a filibuster.
Brady also said the goal would be to draft legislation that did not add to the deficit, once the added revenues from faster economic growth were taken into account. Such an approach would be difficult, but would ease the process of using reconciliation to pass the tax package if Republicans choose to use that tool. Trump, however, has called for tax cuts that outside groups have said would add trillions to the deficit.
