Trump Doesn’t Like Parts of GOP Tax Plan
One of the most interesting aspects of the Donald Trump era will be how well the populist president can get along with members of his own party. Republicans on Capitol Hill are treating the 2016 election as though they captured control of the White House, but they may do well to remember that Trump ran against them for much of the campaign. If they see him as an empty suit upon whom they can project their conservative legislation desires, they may be in for a big surprise.
In an interview with the Wall Street Journal last Friday, Trump revealed that he was not a huge fan of Paul Ryan’s plan to restructure the corporate tax code, saying it was “too complicated” and bloated on the subject of imports and exports.
“Anytime I hear border adjustment, I don’t love it,” he said. “Because usually it means we’re going to get adjusted into a bad deal. That’s what happens.”
House Republicans have proposed a tax plan that includes the border adjustment Trump is talking about – a measure that would tax imports while granting a tax exemption on exports. The hope is that the clause will provide incentives to American companies to keep manufacturing here in the U.S. Without it, Republicans would have to go back to the drawing board with a new slate of reforms.
The tax would hit foreign companies the hardest, which makes it a popular plan with U.S. exporters. But while it would theoretically push American companies to hire workers here at home rather than open up a cheaper plant abroad, conservative donors claim the border adjustment would be “devastating” to the American economy, driving retail costs into the stratosphere. Others, however, say that the move would increase the value of the dollar and offset the initial markup.
Trump told the Wall Street Journal that he was inclined to focus on lower corporate taxes rather than the complex system Ryan and the Republicans were proposing.
“Under the border adjustment concept, if somebody is making a motorcycle or a plane in our country, they’re getting a credit for the plane they make before they send it over to wherever it’s going,” he said. “And you don’t need that plus lower taxes and everything else. And it’s too complicated. They get credit on some parts and not other parts. Where was the part made? I don’t want that. I just want it nice and simple.”
Republicans, though, prefer their plan to some of the proposals made by Trump, including a steep tariff on companies that move operations to foreign countries. Ryan’s spokeswoman AshLee Strong said the House Speaker and Trump would work together on a strong tax plan.
“Speaker Ryan is in frequent communication with the president-elect and his team about reforming our tax code to save American jobs and keep the promises we’ve made,” said Strong. “Changing the way we tax imports and exports is a big part of that, and we’re very confident we’ll get it done.”