Sales Tax: Big Week For Tax Reform
Perhaps wanting to quickly pivot from the health care reform debacle, the administration is poised to roll out its plan for tax reform this week.
One of the biggest news items that went under the radar last week because of the health care debate was the elimination of the BAT, or border adjustment tax. House Speaker Paul Ryan made the announcement, perhaps clearing the way for sweeping tax cuts.
Retailers hailed the move, saying it puts more money in pockets of middle class Americans. Paul's statement read:
“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." - House Speaker Paul Ryan
Treasury Secretary Steven Mnuchin, who has been the white house official spokesman on tax reform, noted in the release:
"The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas." - Steven Mnuchin
In April, Mnuchin and President Donald Trump proposed a new corporate tax rate and three individual tax brackets as a way to simplify the tax code. The brackets included a 15% corporate rate, down from the current 35%, and 3 individual tax brackets: 10%, 25% and 35%.
Expect Tuesday as the day we will begin hearing Tax Reform discussions in earnest. The White House is hosting a small business event where the president is expected to demand a historic overhaul of the tax code.
Trump is expected to use short remarks to attack the business tax rate and argue that the current tax code is one of the biggest obstacles to American workers and entrepreneurs. Then expect the president to take his tax reform sales pitch on the road in August — with some top aides looking to stage a series of speeches through the Rust Belt.
But just like the health care reform rollercoaster, don't expect Democrats to go along with the president's desired reforms.
One week ago, Senate Minority Leader Chuck Schumer wrote, "Old-fashioned capitalism has broken down to the detriment of consumers," laying the groundwork for the argument that there is nothing in the president's tax reform that helps the American people.
Schumer said he wants Democrats to show voters an agenda that appeals to everyday Americans, saying, "We Democrats can answer the call of millions of Americans...by offering them a better deal."
"A Better Deal" is the party's new slogan.