Cruz lays out his tax reform goals

Cruz lays out his tax reform goals

Sen. Ted CruzRafael (Ted) Edward CruzOvernight Finance: GOP criticism of tax bill grows, but few no votes | Highlights from day two of markup | House votes to overturn joint-employer rule | Senate panel approves North Korean banking sanctions GOP criticism of tax bill grows, but few ready to vote against it Anti-gay marriage county clerk Kim Davis to seek reelection in Kentucky MORE (R-Texas) on Wednesday laid out his priorities for tax reform, including full and immediate write-offs of businesses’ capital investments, a longer budget window for the reconciliation process and the repeal the Dodd-Frank financial reform law.

At an event hosted by the Tax Foundation, Cruz said that tax reform is a “fundamental promise that Washington is grappling with.”

Cruz’s speech came the same day that House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyOvernight Health Care: Initial Senate tax bill doesn't repeal ObamaCare mandate | 600K sign up for ObamaCare in first four days | Feds crack down on opioid trafficking Overnight Finance: Senate GOP unveils different approach on tax reform | House tax bill heads to floor | House leaders eye vote next week | AT&T denies pressure for CNN sale GOP tax bill clears hurdle, heads to House floor MORE (R-Texas) announced that a six-person group of tax-reform minded lawmakers and administration officials plan to release a tax framework the week of Sept. 25.

Cruz had discussed taxes frequently when he campaigned for president in 2016, but he is not a member of the Senate’s tax-writing committee. The speech was an opportunity for him to prominently interject his ideas into the tax-reform conversation.

One of Cruz’s top goals is for a tax-reform bill to allow businesses to immediately write off the full costs of their capital investments, a concept known as “full expensing.”

Cruz said that full expensing would be a “massive simplification” of the code and would benefit Main Street.

“One of the most important reforms we ought to include in tax reform is full and immediate expensing,” he said.

Republicans have been divided over whether to include full expensing in legislation. The tax plan House Republicans released last year included the provision and at the same time eliminated the deduction for businesses’ net interest expenses. But some GOP lawmakers, conservatives and businesses would prefer to keep the interest deduction.

Another recommendation from Cruz was to lengthen the budget window in order to facilitate long-term tax cuts.

Cruz said he doesn’t want tax reform to be revenue neutral. However, if Republicans want to pass a tax bill through the reconciliation process in order to prevent a filibuster from Democrats, the legislation can’t add to the deficit outside of the budget window, which is typically 10 years. That means if tax changes increase the deficit, they would have to expire.

Cruz recommended that lawmakers consider lengthening the budget window to 20 or 30 years “to get in and pass a major tax cut.”

“If it expires 30 years from now, that may not be permanent but it’s pretty darn close,” he said.

Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyNewly declassified memos detail extent of improper Obama-era NSA spying Overnight Tech: FCC won't fine Colbert over Trump joke | Trump budget slashes science funding | Net neutrality comment period opens Appeals court decision keeps lawsuit against NSA surveillance alive MORE (R-Pa.) and some prominent outside conservatives have backed a longer budget window. However, the budget resolution that the House Budget Committee approved in July uses a 10-year budget window.

Cruz also said that Republicans should use tax reform as an opportunity to repeal Dodd-Frank, since the law would be difficult to repeal except under reconciliation.

“Dodd-Frank is great if you’re a giant financial institution and it is lousy if you’re a local community bank, if you’re a credit union,” he said.

But there may be procedural hurdles to including Dodd-Frank repeal in a reconciliation rule. Under reconciliation’s Byrd Rule, a reconciliation bill can’t include provisions that don’t directly impact the budget.

Other tax priorities Cruz discussed in his speech included a low corporate tax rate, a tax code simple enough so that people can file on a postcard, and eliminating the estate tax and the alternative minimum tax.

He said a main objective of a tax-code rewrite should be increasing economic growth.

“Growth needs to be front and center,” he said.