WASHINGTON – House Speaker Paul Ryan vowed Tuesday to “fix this nation’s tax code once and for all’’ by passing an overhaul by year-end.
Ryan chose the National Association of Manufacturers as his audience because its companies are expected to benefit from a proposed border adjustment tax that would tax imports and exempt exports.
“About once in a generation or so, there’s an opportunity to do something absolutely transformational, something that will have a truly lasting impact long after you and I are gone,’’ Ryan said. “That moment is here and we are going to meet that moment. Ladies and gentlemen, we are going to fix this nation’s tax code once and for all."
Ryan’s speech is his first major public effort to keep tax reform on track for enactment by year-end. He told NAM members there will be times that they hear that tax reform is on life support or dead, even in the same hour.
“I am here to tell you we are going to get this done in 2017,’’ he said.
“We also agree that we need to get this done sooner rather than later,’’ White House spokesman Sean Spicer said Tuesday. “That's why we're working hand-in-hand with House and Senate leadership and hosting regular listening sessions with outside stakeholders -- like the one that's being conducted currently in the Roosevelt Room here at the White House -- with trade associations from the tech industry to iron out details and get their input on what needs to happen.’’
The border adjustment tax is under fire from conservative groups such as the Club for Growth, retailers who would face higher costs on imports and officials in the Trump administration.
House Ways and Means Committee Chairman Kevin Brady, R-Texas, has suggested that the border adjustment tax might be phased in over five years to ease the transition.
Other methods that would broaden the tax base in order to facilitate an overall reduction of tax rates in a revenue neutral manner also are under fire.
The Municipal Bonds for America coalition has sought – and received – assurances from the White House that the exemption for municipal bonds won’t be eliminated.
Another proposal to broaden the tax base – elimination of the federal deduction for state and local taxes for households that itemize on their returns – is opposed by a wide swathe of lawmakers in high-tax states.
Seventy House lawmakers sent a letter Monday to Treasury Secretary Steve Mnuchin pointing out that the elimination of that deduction would “single out and harm the highest-taxed states in the country, in particular California, New York, New Jersey, and Illinois.’’
New York City taxpayers itemized deductions for an estimated $7.7 billion in state and local taxes in 2014, “or $6,600 per affected taxpayer, according to the Partnership for New York City,’’ the letter said.
In New Jersey, about 1.8 million people itemize on their federal tax returns. “The deduction primarily benefits middle- and lower-income earners: nearly 85% of those claiming the state and local deduction in New Jersey have household incomes below $200,000 per year,’’ according to the letter.
With Republicans in control of the White House and both chambers of Congress, investors have been expecting the GOP to deliver on the promise of tax simplification and lower tax rates.
Asked what his advice is to manufacturers on how to help, Ryan suggested they “show your employees how big a deal this is’’ and encourage them to talk to their local members of Congress.
Republican lawmakers and Trump administration officials have been meeting privately to work out a plan that can be submitted to Congress before lawmakers return from their August recess.
Ryan said Tuesday that tax reform and the rollback of federal regulations are the keys to restoring the economy to 3% growth.
“Let’s talk about how fantastic things will be if we get this done,'' he suggested as a tactic to counter the bickering in Washington. “Let’s all be happy warriors and optimists.’’
