White House Pushes Aggressive Tax-Overhaul Schedule

By Richard Rubin Features Dow Jones Newswires

Trump administration officials pressed an accelerated timeline Monday for advancing a major tax bill this fall along with ambitious goals for the bill's contents.

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Background work on the legislation will happen during August in preparation for committee action in September, a House floor vote in October and a Senate vote in November, Marc Short, the White House director of legislative affairs, said at an event in Washington.

Mr. Short's comments are part of a coordinated effort by White House officials and business groups to turn the country's focus to tax policy, persuade Americans that the issue should be a priority and argue that the administration's plan would yield faster economic growth.

"This is about creating jobs," Treasury Secretary Steven Mnuchin said at the event, which was sponsored by Freedom Partners and Americans for Prosperity, advocacy groups associated with the Koch family of wealthy industrialists. "This is about creating wage growth. This is about a simpler and fairer tax system."

The Koch family, active in conservative politics, largely stayed on the sidelines during the presidential election, but its groups are now spending millions of dollars to support the GOP tax agenda.

Gary Cohn, director of the White House National Economic Council, Mr. Mnuchin and key legislators say they can finish the tax bill this year, though they face numerous hurdles.

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For one thing, no bill has been written. The prerequisite for legislation that could be passed solely along party lines -- the passage of House and Senate budgets -- also isn't completed. Mr. Short said the budget work could happen concurrently with tax writing.

Other deadlines loom that will occupy lawmakers' attention, including the need to raise the debt limit and prevent government funding from expiring at the end of the fiscal year Sept. 30.

Moreover, some Republicans want to take another run at major health-care legislation.

"We've got to get a lot done in the next three, four weeks here," Mr. Cohn said at a meeting of real-estate industry executives. "These are sort of crunch weeks."

Last week, negotiators from the House, Senate and White House set out a unified statement of principles for a tax overhaul, including an agreement to abandon a controversial new way to tax imports and exports known as border adjustment.

The principles focused on the benefits for households and businesses of reducing tax rates, giving companies faster capital write-offs, lowering taxes on U.S. businesses' foreign earnings, promoting a simpler tax system and making changes permanent. They left out many of the hard trade-offs that will challenge lawmakers.

"The farther you get into the weeds, the more difficult it gets, but we are so deep in the weeds right now there's no turning back," Mr. Cohn said.

Mr. Short said the administration is still pushing for a 15% tax rate on business income, compared with the current top rates of 35% for corporations and 39.6% for business income reported on individuals' returns.

The administration is backing away from goals that were in the House Republicans' tax plan, such as allowing businesses to immediately write off the value of capital investments when calculating taxable income, a measure meant to reduce tax bills and promote investment.

The White House is being backed by tax-change advocates in a push that didn't materialize for the Senate health care bill that failed last week.

In the past few days, Koch-affiliated groups and groups affiliated with large corporations and major Republican donors have announced multimillion-dollar ad campaigns to support a tax overhaul. The American Action Network, a center-right group, said Monday it would spend $5 million in August.

Mr. Trump will be active, too, Mr. Mnuchin said. "This is the greatest negotiator," he said. "He's going to be on the road, helping us sell it."

Mr. Mnuchin said the plan would lower tax rates and eliminate "huge deductions," and insisted the plan would be "paid for" in part because faster economic growth would generate more tax revenue. So far, the only large tax break the administration has talked about eliminating is the personal deduction for state and local taxes.

"For most people on the top rate, they're not going to get a tax cut," he said. "Rich people have been able to take advantage of the tax code."

Besides the income-tax rate, many other provisions put forth by the administration in April would benefit high-income households, including proposals to eliminate the alternative minimum tax, lower business tax rates, repeal the estate tax and lower rates for pass-through businesses.

Seth Hanlon, a senior fellow at the Democratic-aligned Center for American Progress, said it was implausible to argue the White House tax proposal doesn't benefit the wealthiest Americans.

--Ted Mann contributed to this article.

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

July 31, 2017 18:29 ET (22:29 GMT)