WASHINGTON (Reuters) - A chief proponent of Republican tax reform in Congress urged the business community on Thursday to avoid a battle over coveted tax breaks next year if companies hope to achieve reforms that lower tax rates to boost economic growth and productivity.
“There’s incredible pressure in Washington not to change a thing, for everyone to keep every special provision there is,” said Representative Kevin Brady, chairman of the U.S. House of Representatives tax committee.
“That tax code is dragging our economy down, wasting billions of dollars in compliance costs and hurting salaries and jobs and growth.”
Brady was speaking to reporters after a speech on tax reform at the conservative Heritage Foundation think tank, where he promoted his own plan to lower the corporate income tax rate from 35 percent to 20 percent and repatriate an estimated $2.6 trillion in U.S. corporate profits stashed overseas.
The House plan, released in June, closely parallels the latest tax reform proposals from President-elect Donald Trump, and the two sides are working to hammer out an agreement on tax reform legislation that could move forward early next year.
The Republican plan would pay for tax cuts by eliminating hundreds of tax breaks, including one that allows businesses to deduct net interest costs on debt, a policy heavily favored by Wall Street investors.
In addition to a sharply lower tax rate, it would provide businesses with other advantages, including the ability to immediately write off the cost of capital investments. The plan would also end taxation on revenues from exports and impose a new tax on imports.
Brady says the approach would result in more buoyant economic growth and a vastly simpler tax code.
“While some would like to have fights over individual provisions in the tax code, the debate we’re looking for in America is whether Americans want something this fair and this simple and this understandable and are willing to make the trade-offs,” he told his Heritage Foundation audience.
“The ability to buy those new buildings, equipment, software, technology and items that not just grow the economy but grow productivity and wages for workers - we think that’s awfully important.”
Brady said the staff of his Ways and Means Committee has begun writing tax reform provisions for next year but added that the panel will also accept feedback from the business community and other taxpayers through the end of 2016.
Reporting by David Morgan; Editing by Jonathan Oatis