An integral component of the House Republicans’ plan to revamp the way corporations pay taxes is in danger, causing legislators to scramble to accomplish one of President Trump’s top priorities and increasing the chances that Republicans might only pass a tax cut versus overhauling the tax code.
A key part of the Republicans’ plan to lower the overall corporate tax rate is a proposed tax on imports that would generate approximately $1 trillion over the next decade to finance lower rates without increasing the deficit. The import tax would also incentivize U.S.-based companies to keep their operations in the country and perhaps convince corporations to move their overseas operations stateside.
After receiving strong opposition to the import tax from retailers, automakers and the oil industry, a number of congressional Republicans have sided against it. Their concern is that the added tax will increase the cost of imports, raising consumer prices.
According to Senate Majority Leader Mitch McConnell (R-Ky), it is likely that there are not enough votes to pass the import tax in the Senate. No Republican senator has publicly endorsed the import tax, and a powerful group of House conservatives contends that it is time to remove the component from the tax plan.
“The sooner we acknowledge that and get on with a plan that actually works and actually can build consensus, the better off we will be,” said Rep. Mark Meadows (R-N.C.), chairman of the conservative Freedom Caucus.
Chairman of the House Ways and Means Committee Rep. Kevin Brady (R-Texas), has strongly backed the import tax plan and still contends that it is the best way to promote economic growth and create domestic jobs. Even so, he is open to alternative ideas.
“I’m still confident that we’re going to stay at the table until we solve that problem, which is how do we stop U.S. jobs from continuing to leave the United States,” Brady said. “We’re going to remain open to the best ideas on how we do that.”
Rohit Kumar, a former tax counsel to McConnell, said, “I would never declare anything dead until there was a fully formed alternative. I think that’s one of the big challenges that Republicans are struggling with right now.
“I still think that Republicans, out of pure political necessity, if nothing else, are likely to find a way to get some sort of tax bill to the president’s desk for his signature,” Kumar said. “Whether the legislation turns out to be tax reform or simply a tax cut “is still very much in question right now.”
JOIN THE MOVEMENT to SAVE THE NATIONAL ANTHEM
Please join the thousands of DML readers who have purchased a bumper sticker. CLICK HERE.
If you would like to receive Breaking News text alerts on a smartphone or tablet, download the DML APP which is completely FREE and easy to use. Go to the Google Play Store or the IOS App Store and search for DML APP. Be sure to keep the app’s notifications setting on. Another way to receive alerts is to text to 40404 the following message: follow @realdennislynch (be sure to put a space between the word follow and the @ symbol).
To see more stories like this, sign up below for Dennis Michael Lynch’s email newsletter.
Sign up to get breaking news alerts from Dennis Michael Lynch.
FBI warned to hand over records ‘unlawfully removed’ by Comey