Congress’s chief tax-law writer said Wednesday that he’s willing to stomach a tax code overhaul that deepens the federal deficit in order to jump-start the economy, throwing his weight behind the White House’s goal of boosting jobs.
That could mean expanding on existing deductions for charitable giving and “unprecedented” capital expensing for businesses, House Ways and Means Chairman Kevin Brady said at the Reagan Ranch Center in Santa Barbara, California.
He said eventually the package must reach balance, but in the near term he’s looking for “the greatest growth for the greatest number of years.”
“So yes, we will be open to losing tax revenues in these early years, but economic growth and eliminating special provisions in this bloated tax code so we [lower] the rates for everybody would help us balance over that period,” he said.
The GOP has been having an internal debate over the parameters for the tax overhaul, with some lawmakers pushing for a package that won’t deepen the near-record levels of federal debt. That, however, would likely mean slimmer tax cuts than Mr. Brady, Texas Republican, is now eyeing.
Deficits also mean the GOP would have to make the tax cuts expire at the end of a decade, in order to comply with fast-track budget rules Republicans plan to use to advance their package.
Democrats have said they will resist any plan that adds to the deficit, meaning the GOP will have to muster all of the votes from within its own ranks — a strategy that failed in spectacular fashion during the Obamacare-repeal effort.
Republican lawmakers have pledged to wring out some revenues by eliminating breaks and exemptions in the code, but have said they want to preserve popular deductions for mortgage interest and charitable giving.
Mr. Brady said Wednesday he’s looking at going beyond that, however.
“We are keeping the charitable deduction more than that, we are working with charitable organizations to explore ways to unlock more charitable giving,” he said. “The strongest incentive for charitable giving is a strong economy.”
Another possible addition to the price tag would be to allow businesses to fully deduct their capital costs right away, rather than the current system that has them spread things out over a number of years.
And Mr. Brady said he wasn’t looking at some sort of partial expensing plan with a multiyear phase-in, but rather “unprecedented” expensing.
“We know when businesses of all sizes can immediately write off their business investment and buildings equipment, software and technology, it drives Main Street jobs and it drives productivity of the American worker,” he said.
Mr. Brady timed the Wednesday address to coincide with the anniversary of the day in 1986 when congressional negotiators hammered out the last major tax code overhaul.
To drive home the symbolism Mr. Brady and other panel members spoke from a replica of the table President Reagan used when he signed the 1986 bill into law.
“For the first time in 31 years, we have a White House, a House, and Senate truly committed to fixing this broken tax code,” Mr. Brady said. “It will not be easy. Tax reform, legislatively — it is the biggest challenge of any generation.”
GOP leaders in the House, Senate and administration have released broad principles they say they agree on, but have yet to fill in the details that will make or break the effort.
• David Sherfinski can be reached at dsherfinski@washingtontimes.com.
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