On Thursday, the House Ways and Means Committee unveiled their coveted tax reform plan -- but despite promises that Congress will pass it by 2018, National Economic Council Director Gary Cohn said it is unlikely to be retroactive this year.
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House Republicans will meet next week to fine tune the plan while the Senate creates its own plan, but Cohn told FOX Business’ Stuart Varney that “we will work out those differences.”
Concerns that high-income earners in states including New York, California and New Jersey could end up paying more under the plan because of controversial changes to the State and Local Tax Deductions are unwarranted, Cohn said.
“You have to look at the tax plan in it’s entirety, that’s what we’ve been trying to design,” he said, adding that, “We’re trying to drive economic growth, and we’re trying to drive wages for middle-class Americans. That’s what’s really important. When we drive economic growth everyone in the country wins.”
Some hope that if tax reform is passed in 2017, it would be retroactive to Jan. 1, 2017. But during an interview on “Varney & Co.”, Cohn said, “We’re trying to deliver great tax reform to the American public. We can’t get it retroactive to this year, we’re trying to do a tax plan that starts on January first of next year.”
The House plan as it stands would permanently cut the corporate tax rate from 35% to 20%. Some rumblings in the Senate have raised concerns that the maximum corporate tax rate would increase to 22% instead.
“President Trump’s not going to agree to that,” Cohn said.
Democrats were quick to take issue with the Republican tax plan, with House Minority Leader Nancy Pelosi (D-Calif.) even calling it a “Ponzi scheme.”
But Cohn countered Democrats’ claims saying, “I don’t think they’ve read the piece of legislation yet, I really don’t. Because if they’d read it, they wouldn’t be able to say that. If you look at what The Washington Post said yesterday, they gave the Democrats four Pinocchios and told them to take down their text because they were actually lying.”