Tax reform was a top priority for President Trump during his campaign, but there are mounting concerns it could be pushed back to later in 2017. House Majority Leader Kevin McCarthy (R-Calif.) detailed the Congressional Republicans’ timetable for achieving tax reform.
Continue Reading Below
“Nothing’s being pushed out, don’t worry about that. We have a 200-day plan here. And there’s a structure and a method to this,” McCarthy told the FOX Business Network’s Maria Bartiromo.
According to McCarthy, regulatory reform was an important first step to lay the groundwork for tax reform.
“We started with regulation reform and you’ve watched that, that’s been a two-part plan. Changing the structure of how you do regulation with the REINS Act. Now you’re watching the Congressional Review Act. Those are a number of bills that you can pass just with a simple majority in the House and the Senate.”
McCarthy saw it as necessary to repeal and replace Obamacare before tax reform could be achieved.
“Then we’re moving onto repealing and replacing Obamacare, that’s moving this month and next month. Then you go into tax reform because after you’ve done health care, it changes the baseline, you can expand where you do tax reform.”
McCarthy saw tax reform as key to driving companies back to America and boosting U.S. economic growth.
“If you want to solve the majority of problems in America, you’ve got to get growth in America. And America creates this tax system, gives every incentive for companies not to be in America, that’s why you have inversions, the highest corporate rate.”
McCarthy then explained how the current tax system puts U.S. products like a Harley-Davidson motorcycle at a disadvantage compared to its competitors, such as a BMW motorcycle.
“Let’s take a Harley-Davidson motorcycle. Where it’s built in America and it’s taxed. It leaves America and say it goes to Germany. Well, it’s taxed when it’s entered that country and it competes against their products taxed twice.”
On the other hand, “Take a BMW motorcycle, leaves Germany, they have a VAT tax so it gets rebated, not taxed, comes into America and it’s competing against our product, but it has an advantage.”
McCarthy reassured skeptics that Congressional Republicans were on schedule to achieve tax reform in President Trump’s first year in office.
“This is right on pace of what we have planned and laid out to get done in the first year.”
McCarthy then detailed the process for pushing tax reform through Congress.
“It starts in the House, remember the constitution, article one, section seven, all tax reform starts in the House. And we’re working on this now, the Ways and Means have been working on this long before, and then it will go to the Senate. But you have to do health care first and then tax reform and then we’ll do infrastructure after that.”