Members of Congress were pushed by corporate executives to go for a tax reform package which will be permanent. This happened on May 12 when a number of businesspersons, including top executives from S&P Global Inc., AT&T Inc. and Emerson Electric Co said permanent reforms will increase certainty for longer term investments. The business executives offered a formula which includes end to taxation on profits made in countries other than the United States, a slew of permanent tax cuts and immediate expenditure for the capital investments. Robust research incentives were also included in the scheme of things.
This hearing, regarded as the first of many to be held by House Ways and Means Committee, was done to show that lawmakers are moving to reform the tax schedule. This has become important as many have started to doubt President Donald J. Trump's ability to completely change the United States tax code in 2017.
The private sector executives insisted that the package to be made by Congress must, not increase the already burgeoning federal deposit. According to Wall Street, if this is done, there would be more investments within the United States, job creation and economic growth. David Farr, the chief executive of Emerson, and National Association of Manufacturers chairman, said that he prefers permanent tax rate and the requirement is for a minimum of 10 years. The association has about 14,000 members and is widely regarded as one of the more powerful trade groups.
Republicans and roadblocks
For House Republicans, this endorsement of the permanent policy changes may help them to advance their preferred revenue neutral approach. This comes in the middle of a tax debate time which has resulted in multiple calls for numerous deficit funded tax slashes. All this will expire after 10 years as per the rules of the Senate.
Trump administration officials met with Senate leaders and House leaders as well as part of their efforts to reach an agreement on legislation which could pass Congress. It is to be noted that Trump made tax reform a central feature during his 2016 presidential campaign.
There is one catch: the Congress must enact healthcare legislation at first. The Senate debate on healthcare could persist all through the summer. This would leave reforming tax system for the latter part of 2017 or during the early months of 2018. If this fails, tax reform will be postponed for many years.