Conservatives Await Details on Trump’s Tax Plan

The House Budget Committee is expected to unveil its 2018 budget with reconciliation instructions for tax reform in May.

By Published on April 25, 2017

Details on President Donald Trump’s plans for tax reform are expected to be unveiled Wednesday, and Conservatives in the House Freedom Caucus are looking forward to seeing the administration’s proposal to bring down rates.

The White House largely blamed members of the powerful conservative group for the decision to pull the House Obamacare repeal off the floor in March, alleging they were largely responsible for the lack of votes. Trump went so far as to threaten to support primary challenges against those who refused to get behind the bill, saying he was willing to bypass the group on future legislative priorities.

Striking a compromise between the different factions of the conference on health care has proven to be a challenge for the party. Now members appear poised to agree on a bill and appear confident overhauling the tax code will be an easier process than repealing Obamacare. Still, they are waiting to see where the Trump administration stands on one contested component of the leadership-backed blueprint: the border adjustment tax (BAT).

“The first two pieces are a home run — so there’s rate reduction and then the immediate expensing. Everyone loves it. Both will pop the economy,” GOP Virginia Rep. Dave Brat told The Daily Caller News Foundation. “On the border adjustable piece, it’s just a standard DC swamp contest, right — the major exporters want it, the major importers don’t want it.”

The border adjustment language, which would tax imports while excluding exports, is a key component of the “A Better Way” tax proposal. Proponents argue the measure is necessary to offset major tax cuts and incentivize companies to produce products domestically. Critics argue it could potentially lead to consumers and businesses paying more for imports.

The provision generates a whopping $1.2 trillion in revenue over the course of a decade, according to Tax Foundation, but certain economists argue the growth rates from tax cuts alone will be sufficient to avoid adding to the deficit.

“Retailers like Walmart will never go along. A carbon tax would be even worse,” Steve Forbes, Larry Kudlow, Arthur B. Laffer and Stephen Moore wrote in a Wednesday op-ed for The New York Times. “The best way to bring jobs back to America is to simply lower tax rates now while rolling back anti-jobs regulations, such as rules that inhibit American energy production.”

Secretary of the Treasury Steve Mnuchin said border adjustment is in consideration, but would not confirm whether it will be in the Trump proposal.

Both moderates and conservatives in Congress are expressing concerns over the tax plan. Some speculate if the bill is delay it will likely be due to a divide over the BAT.

“The key dispute is going to be how the border adjustable piece comes out in the House bill and whether the White House even wants to go there,” Brat said. “Mnuchin is coming up with a tax piece in Treasury, so we’re all waiting to see where and how the White House leads.”

The House Budget Committee is expected to unveil its 2018 budget with reconciliation instructions for tax reform in May.


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Copyright 2017 The Daily Caller News Foundation

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