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Brady begins work merging tax plans

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Tax Hot Topics: Brady begins work merging tax plansRepublicans on the Ways and Means Committee emerged from a two-day retreat pledging to work with the administration on developing a unified tax plan based on the blueprint released by House Republicans last year and the plan released by President Trump in late April.

Committee Chair Kevin Brady, R-Texas, made clear that the committee has no plans to abandon its own blueprint, but that he would make “refinements” to try and reach consensus with the White House. The White House plan was short on specifics and is more of an outline of goals than a full plan. It shares some aspects of the House GOP blueprint, but also a few key differences. See our full PDF alert for a side-by-side comparison of the two plans.

Trump proposed a steeper corporate rate cut to 15%. Brady and other members have stressed the need for revenue neutrality and are pointedly not committing to a rate lower than their 20% proposal. Trump’s plan also made no mention of border adjustability, which remains the most contentious aspect of the House plan.

Treasury Secretary Steven Mnuchin recently said that the administration doesn’t think the proposal works in its current form, and that there are other revenue raising options to pay for tax reform. But Brady and House Speaker Paul Ryan, R-Wis., remain committed to it for now. Ryan said he agreed it needed changes to address concerns, while Brady has insisted it remains consistent with Trump’s own principles.

Trump has repeatedly endorsed the idea of imposing taxes on imports in the same way other countries impose value-added taxes on American products. Although the border adjustment gets to the substance of those complaints, Trump has said he prefers ideas like “mirror” or “reciprocal” taxes.

Brady has said the next step will be hearings on the tax reform plans and that it will take time to craft a unified bill.

Contact:
Dustin Stamper
Director, Washington National Tax Office
T +1 202.861.4144

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