Don’t Miss Chance to Rewrite Tax Code, Paul Ryan Will Tell His Party
WASHINGTON — Speaker Paul D. Ryan, hoping to revive his dream of rewriting the tax code, will insist in a speech on Tuesday that Republicans come together to avoid letting a “once in a generation” opportunity slip out of their hands.
A year after Mr. Ryan unveiled a blueprint called “a better way” for overhauling the tax system, his party has struggled to come together around a plan. The tax overhaul has stalled amid the legislative logjam Republicans have created in trying to repeal and replace the Affordable Care Act. The tax cuts they have promised might languish until 2018 — if they happen at all.
In his first major speech on the subject this year, Mr. Ryan will tell Republicans they must move forward without further delay. “We need to get this done in 2017,” he will say to the National Association of Manufacturers in Washington, according to excerpts from his speech. “We cannot let this once-in-a-generation moment slip.”
According to his office, Mr. Ryan will not go into great detail about where he stands on the various tax proposals that have been dividing Republicans for months, but he will provide a broad outline of his thinking.
He will acknowledge that the debate over a “border adjustment” tax on imports — which was the centerpiece of the House plan, and which the White House and many House and Senate Republicans oppose — still needs to be settled. However, he will argue that the country must switch to a territorial system, which would tax all businesses solely on the goods and services they sold in the United States.
“We must think differently so that, once again, we make things here and export them around the world,” Mr. Ryan will say.
He will also make the case for permanent changes to the tax system, rather than just temporary tax cuts.
Because Republicans are planning to pass tax legislation without the help of Democrats, they are relying on the Senate’s budget reconciliation rules, which require only a simple majority, rather than 60 votes. However, tax cuts that add to the deficit would expire after 10 years under these rules.
The Trump administration has said that short-term cuts would be better than nothing, but Mr. Ryan and Representative Kevin Brady, the Republican chairman of the Ways and Means Committee, are pushing for legislation that does not increase the deficit. They want lower business and individual tax rates to remain in place indefinitely because they think this is better for promoting economic growth.
Despite the apparent lack of progress on taxes, Republicans in the House and Senate have been meeting frequently with President Trump’s economic team to craft a tax plan that they all can agree on. Initially, they hoped to pass a bill before August, but that goal has slipped to the end of the year.
Many business leaders and tax experts are pessimistic that anything will be passed in 2017.
Lobbyists have been hanging on lawmakers’ every word and working feverishly to protect their favorite deductions and loopholes. The border adjustment tax has been the biggest source of tension between the White House and Mr. Ryan, but they have also differed on how far to lower the corporate tax rate and how to handle the deduction of interest expenses. Without eliminating many prized deductions, it is impossible to lower tax rates substantially without adding to deficits.
The calendar is also complicated, as Congress cannot begin to formally consider tax legislation until it finishes with health care and passes a 2018 budget resolution. So far, Republicans have not been able to agree on a path forward on either issue.
But rewriting the tax code is a goal that is dear to Mr. Ryan’s heart, and he is preparing to push through the headwinds that have stymied lawmakers for the last 30 years.
“Transformational tax reform can be done, and we are moving forward,” he will say. “Full speed ahead.”