Trump to instigate tax-reform push

The US president, Donald Trump, will begin a major push, next week, to convince the American public of the need for tax reform, shifting his focus to fiscal policy in an effort to win a big legislative victory by the end of the year, it has been reported.

Sat, 26 Aug, 2017 - 01:00

Mr Trump will begin the effort next Wednesday, with a speech in Missouri, the first in a series of addresses to generate public support on the issue, Gary Cohn, director of the US National Economic Council, told the Financial Times.

“We are completely engaged in tax reform,” Mr Cohn said. “Starting next week, the president’s agenda and calendar is going to revolve around tax reform. He will start being on the road, making major addresses justifying the reasoning for tax reform.”

Although Mr Cohn stressed that tax reform would be front and centre of Mr Trump’s agenda, the Republican-controlled Congress faces two other pressing issues, when it returns from its August recess on September 5.

Lawmakers need to approve an increase in the US debt ceiling to allow the federal government to keep borrowing money and paying its bills, including its debt obliterations. Separately, they need to pass at least stop-gap spending measures to keep the government operating.

Asked by the FT whether the debate over the debt ceiling could derail the tax-reform drive, Mr Cohn said that, “at the end of the day, Congress has to increase the debt ceiling. That is just the reality.”

“The key point is this: tax reform is the White House’s number-one focus right now,” he added.

Mr Cohn said White House officials had been working with Senate majority leader, Mitch McConnell, House of Representatives speaker, Paul Ryan, and other leading congressional Republicans, on “an outline and skeleton” for the tax-reform proposal “and we have a good skeleton that we have agreed to.”

While commentators have, in recent times, begun to doubt Mr Trump’s ability to push through his economic agenda, when his tax-reform plans — particularly a slashing from 35% to 15% in the US corporate tax rate — were first mooted, back in April, it led tax experts here to believe that while US companies would still likely invest in Ireland and other lower-tax locations, fewer would do so, resulting in a slowdown in inward foreign direct investment (FDI).

Asked whether the focus on tax reform had been complicated by Twitter attacks by the Republican president on Mr McConnell and Mr Ryan, Mr Cohn said the White House officials worked well with the two “and we have made a massive amount of progress” on taxes.