The White House released a joint statement (the “statement”) with congressional Republican leadership expressing a “shared vision” for comprehensive tax reform. The group of Republican leaders consisted of House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX).
The Republican leaders asserted a commitment to introduce a “simpler, fairer” tax system with lower rates for American families. As described, the shared framework would reduce taxes for “small businesses so that they can compete with larger ones” and “all [U.S.] businesses so they can compete with foreign ones.” The Republican leaders called for a permanent system allowing more capital expensing to facilitate economic growth. They also indicated the following priorities: (i) to create an environment where American companies are incentivized to keep jobs in America rather than outsource them overseas, (ii) to create a more “level playing field” between domestic and foreign companies,” and (iii) to protect the U.S. tax base.
The Republican leaders set aside the idea of adopting a border-adjustment tax (“BAT”).
“While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform.”
The Republican leaders announced that they expect a tax reform plan to move through the Senate Finance Committee and House Ways and Means Committee by the fall of 2017.