“It produces a lot of uncertainty for businesses. You can’t completely redesign the budget tax system for nine-and-a-half years, and then flip it back in 10 years,” Ryan said in February during a PBS NewsHour interview. “We do envision revenue-neutral tax reform that is permanent.”
White House economic adviser Gary Cohn and Treasury Secretary Steven Mnuchin are expected to meet with Republican leaders Tuesday on Capitol Hill to go over the president’s tax plan. Cohn and Mnuchin have said they’ve been meeting with congressional leaders on tax issues, but the announcement about a tax plan coming Wednesday was said to be a surprise.
Senate leadership seemed skeptical of a business rate of 15 percent, which was part of Trump’s campaign tax plan. Senate Finance Chairman Orrin Hatch said he doubted that a corporate rate that low could be achieved.
“I’d like to, but I don’t know,” he told reporters on Monday.
“It’d be great if we could get there,” said Senator Pat Toomey, a Pennsylvania Republican. He declined to comment on whether tax reform should be revenue-neutral.
Economic Growth
Douglas Holtz-Eakin, a Republican economist and president of the American Action Forum, said Trump campaigned more on tax cuts than revenue-neutral tax reform. He said the White House’s demands will be central to the debate.
“The only way tax reform gets done is to have tremendous White House involvement, effort and persuasion,” Holtz-Eakin said.
Mnuchin indicated on Monday that the administration is less concerned with tax cuts adding to the deficit. He said the president is “very determined” that the U.S. can achieve sustained annual economic growth of 3 percent or greater, which would pay for the tax cuts along with “trillions of dollars” brought in from offshore havens.
The Tax Policy Center’s Williams was doubtful: “History belies that,” he said. “We haven’t seen tax cuts that actually pay for themselves.”