House Speaker Paul Ryan insisted on Thursday that Congress will overhaul the U.S. tax system this year despite the chaos consuming Washington and the political divisions in Congress.
“I feel very confident we can meet this goal,” Ryan, R-Wis., told reporters.
Ryan was bolstered by skittish business leaders who began an aggressive lobbying effort to ensure that their vision for a tax overhaul isn’t lost in the daily distractions of President Donald Trump‘s administration.
The conservative Koch brothers’ political network announced it is preparing to spend millions of dollars toward that end. The announcement came on the same day a handful of business executives told a congressional committee that the current tax system makes U.S. companies uncompetitive.
“We no longer live in a world where the U.S. can set a corporate tax rate without considering what our international competition looks like,” John Stephen, AT&T’s chief financial officer, told the House Ways and Means Committee. “Countries are vigorously competing against each other to attract investment and jobs, but the U.S. has done little to retain its competitive advantage.”
The Trump administration released a one-page tax proposal last month that included massive tax cuts for businesses, a bigger standard tax deduction for middle-income families, lower investment taxes for the wealthy, and an end to the federal estate tax for the very rich.
Thirty-one years after the last overhaul, there is widespread agreement that the current tax system is too complicated and picks too many winners and losers, compelling companies to make business decisions based on tax implications instead of sound business reasons.
But there are deep political and practical disagreements over how to fix it. Is it OK for a tax overhaul to add to the nation’s debt? Should corporations pay less? Should rich people pay more?
“I do believe that there are very serious and legitimate concerns to any version of tax reform, and we’re going to have to accommodate those concerns as we move to a new tax system,” Ryan said.
Billionaire industrialists Charles and David Koch are undertaking a multimillion-dollar campaign through the summer to ensure their conservative tax plan is not forgotten, said James Davis, spokesman for the Kochs’ political network.
The campaign will include digital ads and town hall meetings, along with phone banks and direct mail.
“Now is the time. We’ve got to unite around these principles,” Davis said. “The White House hopefully will see this as a jolt to support them in driving this forward.”
The Koch push reflects broader concerns from the nation’s business community that Trump’s promise of a tax overhaul may fall victim to his mounting political challenges. The stock market on Wednesday suffered its largest single-day loss of the Trump presidency. That was before the Justice Department appointed a special counsel to investigate allegations that Trump’s campaign collaborated with Russia to sway the 2016 election.
Treasury Secretary Steven Mnuchin said 100 people at his department are working on an overhaul, and that the goal is to bring “meaningful relief” to the middle class and make American businesses competitive.
Mnuchin testified before the Senate Banking, Housing and Urban Affairs Committee – his first appearance before that committee since being sworn in.
He said the U.S. can achieve 3 percent economic growth or more if the United States makes historic changes in taxes and regulations.
Democratic lawmakers weren’t buying that economic growth would pay for Trump’s tax cuts.
“I think all you’re doing is just adding to the deficit, which is incredibly irresponsible to the children of this country,” said Sen. Joe Donnelly, D-Ind.
Mnuchin replied, “I can assure you we have no interest in doing that.”
Sen. Jack Reed, D-R.I., pressed Mnuchin to commit that the Trump administration’s tax overhaul wouldn’t raise taxes on those Americans making less than $250,000.
Mnuchin said that the administration’s goal is tax relief for the middle class.
“I can assure that the president’s objective and my objective is that we create a middle-income tax cut and that we do not raise taxes on the middle income, if anything, the opposite, we are trying to create a middle-income tax cut,” Mnuchin said.
Republished with permission of the Associated Press.