Ryan seeks manufacturing muscle for tax push

Ryan seeks manufacturing muscle for tax push
© Greg Nash

Speaker Paul RyanPaul RyanGingrich, small biz to launch major tax cut campaign GOP divided over care for transgender troops Want bipartisan health reform? Make the debate honest again MORE (R-Wis.) on Tuesday will rally manufacturers on tax reform, as the tax plan he released nearly one year ago faces increasing pushback from fellow Republicans.  

The Speaker will give an address at an event hosted by the National Association of Manufacturers (NAM) that his office is billing as his first major address on tax reform this year. He will also participate in a question-and-answer session.

The speech is unlikely to go into the granular specifics of a tax bill. Instead, it will discuss what “tax reform could look like and how it would lead to a more confident America,” Ryan’s office said Monday.

“With more jobs, higher wages, and a stronger economy, American workers and families would be the greatest beneficiaries of this reform,” Ryan’s office said. “That’s why, following the principles outlined earlier this year by President Trump, the House, Senate, and administration are working together to meet this historic opportunity.”

The Speaker’s office last week said Ryan chose to give the speech at the NAM conference because one of his goals is to encourage companies to bring jobs back to the U.S.

It won’t be the first time this year that Ryan has discussed tax reform with manufacturers. Last month, he pitched tax reform to Ohio business leaders after touring manufacturing and assembly facilities in the state.

Dean Zerbe, a former aide to the Senate Finance Committee who now serves as national managing director of alliantgroup, noted that manufacturing is on the forefront of policymakers’ minds as they work on tax reform. 

“Trump campaigned on manufacturing,” Zerbe said, and manufacturing is also “near and dear” to Ryan. 

Americans for Tax Reform President Grover Norquist said that by giving the speech before manufacturers, Ryan is emphasizing that tax reform isn’t just about helping the financial industry. 

“You’re talking about the heartland, you’re talking about investing in real jobs,” he said.

Ryan will be kicking off NAM’s Manufacturing Summit, along with Vice President Pence, who will also speak at the event. As part of the summit, NAM’s members will also head to Capitol Hill this week to discuss tax reform and other issues with lawmakers.

NAM is a strong supporter of tax reform, and the group’s priorities for a tax-code rewrite are in line with the blueprint Ryan released in June 2016.

Both Ryan and NAM want lower tax rates for corporations and non-corporate businesses, an international tax system that allows the U.S. to better compete with other countries, provisions that allow businesses to quickly recover the cost of their capital investments, and a permanent research and development tax credit.

 

“We want tax reform now. We think it’s really important,” said Dorothy Coleman, vice president of tax and domestic economic policy at NAM. She added that it’s becoming increasingly apparent that the U.S. tax code is holding businesses back.

Tax reform has “become an economic imperative as well as a political imperative,” Coleman said. 

Ryan’s speech comes at a critical time for Republicans’ tax reform effort, given the divisions in the party over elements of his plan. 

A provision in the blueprint to tax imports and exempt exports, known as border adjustment, has strongly split businesses and has found little support from Senate Republicans. NAM is one of several prominent business groups that has not taken a stance on the border adjustments proposal. 

Some lawmakers and businesses have also expressed concerns about a provision in Ryan’s blueprint to eliminate the deduction for businesses’ net interest expenses. Additionally, a number of prominent conservatives and GOP lawmakers say that they do not want tax reform to be revenue neutral, as Ryan and Senate Majority Leader Mitch McConnellMitch McConnellSenate healthcare bill appears headed for failure Talk of Trump pardons reverberates on Sunday shows Trump backers eye GOP primary challenges for Flake, Heller MORE (R-Ky.) want. 

Ryan and House Ways and Means Committee Chairman Kevin BradyKevin BradyHealthcare debacle raises pressure for GOP on taxes Trump administration outlines negotiating priorities for NAFTA Charities push GOP for tax reform change MORE (R-Texas) have said they want to modify the BAT so that import-heavy industries have time to adjust. 

Brady last week said he’s interested in phasing in the border tax over the course of five years, and also floated exceptions to the elimination of interest deductibility for small businesses, land and regulated utilities. But those suggestions haven’t been well received by the businesses that opposed the original provisions in the blueprint on the import tax and interest deductibility. 

It’s unclear to what extent Ryan will discuss possible changes to his blueprint during Tuesday’s speech.

The news release from Ryan’s office on Monday highlighted aspects of the plan that are widely supported by Republicans. It did not explicitly mention border adjustment but said that tax reform “will level the playing field by removing incentives to ship jobs overseas” — a main goal of the import-tax proposal.

Ryan’s office said that the Speaker will make it clear that the effort by congressional Republicans and the White House to create a unified tax bill is “full-speed ahead.” 

Tax experts said it’s valuable for Ryan to be keeping tax reform in the spotlight.

“I think it’s good to keep it in the public discussion, continue to demonstrate it’s a priority,” said Marc Gerson, vice chair of the tax department at Miller & Chevalier and a former aide to the Ways and Means Committee.