Congress seen as not likely to pass tax overhaul quickly

Congress seen as not likely to pass tax overhaul quickly

But President Donald Trump's administration has been all over the map on tax reform.

Williams said he's been in contact with Gary Cohn, Trump's chief economic adviser and former COO of Goldman Sachs, over his tax reform proposal, but it's unclear where Trump stands on the border adjustment tax. Brady said that would remove any tax incentive to move manufacturing or research operations overseas and make it easier for American exporters to compete globally.

In this simplified scenario, each business sells $200 of products and encounters $100 of costs. They also warn that the new tax could violate trade rules under the World Trade Organization. Therefore, both of the businesses have $100 of taxable income, equal to their profits.

Republicans have been working on a plan to cut the corporate tax rate to 20 percent from 35 percent, end taxing foreign profits for US -based multinationals and cut other tax rates for businesses and investors - as well as simplify and cut personal income taxes. Opponents have gained valuable allies in Trump's administration.

Only U.S. -based revenue and expenses count toward a company's taxable income, so the importer would be liable for its full $200 of sales and would not be able to deduct its $100 of expenses overseas. Hence the import tax.

"It has proved to be a very controversial issue, particularly on the Senate side where it doesn't look like there is going to be enough support for it", said Mike Sommers, the president of American Investment Council, which represents private equity firms. Currencies, like other goods and services, are traded on the global market and, in theory, operate by the same supply and demand forces.

In theory, economists say that the new tax would cause the dollar to increase in value compared to other currencies. Companies that mostly export goods have been more supportive. "They don't share a lot with us", she said.

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So House GOP leadership must raise taxes or cut spending to pay for a lower tax rate.

But just how realistic is that?

"Democrats raised this letter with Republicans during the meeting, noting how this type of partisan action hurts the prospects for bipartisanship in other issues, such as working together on issues like tax reform", the Democratic aide said. Petersburg, also said the move was justified, calling the strikes "a proportional and appropriate response" against "continued atrocities committed by Bashar al-Assad against innocent men, women, and most horrifyingly, children and infants". Because lower-income Americans disproportionately spend their income on imports, they would be hit the hardest, according to Gale. Texas Sen. John Cornyn said, "There's many unanswered questions about proposed border adjustment tax" in a January tweet.

With a months-long tax reform fight ahead, the proposal is already on shaky ground.

In the Senate, many Republicans think such a "border adjustment tax" is a awful idea that could drive up consumer prices and spark a trade war, hurting American consumers and workers alike.

If Trump doesn't want to see another major legislative priority die in utero, he should abandon the ambition of comprehensive tax reform, and either slash tax rates for ten years, or do a corporate-repatriation holiday paired with some infrastructure investment.

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