GOP to begin vigorous sales job on tax reform

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Republicans will be vigorously selling tax reform over the August recess, following the release of shared tax-reform principles and the Senate’s failure to pass even a scaled-down ObamaCare repeal bill.

Now that GOP leaders and the White House have announced a consensus on goals for tax reform, they are hoping to get voters excited about forthcoming legislation. And they’ll have business groups and conservative advocacy organizations helping them in the efforts.

The campaigning on tax reform was going to be in full force even if the Senate had a successful healthcare vote. But the failure to repeal ObamaCare makes passing tax-reform legislation even more crucial, as Republicans want a legislative success to tout for the midterm elections.

{mosads}The healthcare defeat “put pressure on getting a victory” on taxes, said Marc Gerson, chair of Miller & Chevalier and a former tax counsel to the House Ways and Means Committee.

Some GOP lawmakers have continued to express an interest in working on healthcare, but congressional GOP leaders have signaled that they are ready to shift to other priorities.

“We have so much work still to do, and the House will continue to focus on issues that are important to the American people. At the top of that list is cutting taxes for middle class families and fixing our broken tax code,” Speaker Paul Ryan (R-Wis.) said in a statement Friday. “I’m glad that members will now take time to hear directly from those they represent and make the case for historic tax reform that we intend to pursue in the fall.”

Similarly, Senate Majority Leader Mitch McConnell (R-Ky.) said just after the healthcare defeat that it’s “time to move on.”

Ryan and McConnell are two of the members of a group known as the “Big Six” that also includes the chairmen of the tax-writing committees and members of President Trump’s economic team.

The group on Thursday released a joint statement that outlined broad goals for tax reform, such as lowering rates for individuals and large and small businesses, a preference for tax changes to be permanent and incentivizing companies to bring jobs and profits back to the U.S. The statement also took off the table Ryan’s controversial border-adjustment proposal to tax imports and exempt exports.

The Big Six had not been expected to release tax guidelines until September, so the fact that the principles were released in July signals a desire to pivot to tax reform and to arm lawmakers with information to discuss with constituents, said Rohit Kumar, a former McConnell aide who now leads the tax-policy practice at PwC.

Kumar noted that tax reform involves making difficult tradeoffs, so “lawmakers need to come back steeled, ready to have those conversations” in a way that could lead to a positive outcome.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) has been providing lawmakers with materials to help them make the case for tax reform over the recess. These include a calendar for August with 31 reasons for tax reform, and a pocket card that discusses how tax reform will benefit people.

Brady also is planning to speak at the Reagan Ranch in California on Aug. 16 — the day in 1986 that a House-Senate conference committee reached an agreement on the last tax-reform bill to become law. Other lawmakers are also being invited to attend the event.

“We’re just going straight ahead [on tax reform],” Brady told reporters Friday. “If anything, because of the statement yesterday — despite the setback, the letdown on healthcare — I think people are awfully excited about being able to unify behind this in August and through the fall.”

In the last several months, Ryan has spoken about tax reform at factories around the country, and the Speaker is likely to hold additional events on the topic. President Trump is also expected to use his bully pulpit to help sell tax changes.

In addition to lawmakers and the White House, a number of outside groups will be campaigning on tax reform.

Business Roundtable on Friday announced a multimillion-dollar campaign about the importance of tax reform to workers and businesses. The campaign will include radio and TV advertising.

The U.S. Chamber of Commerce is also planning a tax-reform effort. And Charles and David Koch’s political network, which launched a multimillion-dollar effort on tax reform in May, is furthering its push by holding events featuring administration officials and House Freedom Caucus Chairman Mark Meadows (R-N.C.).

The Koch network was strongly opposed to the border-adjustment tax, as was the retail industry. By announcing the proposal’s death in their joint statement, administration officials and congressional leaders are allowing stakeholders to focus more on championing a tax-code rewrite and less on opposing a potential element of tax reform.

“We’re on to working to get tax reform done,” said Brian Dodge, a spokesman for the Retail Industry Leaders Association.

The cohesive messaging from the House, Senate, White House and business community makes tax reform different from healthcare.

“There was no organized campaign to overturn ObamaCare,” said Americans for Tax Reform President Grover Norquist.

Norquist added that constituents who would have benefited from ObamaCare repeal weren’t contacting their lawmakers, but “the people who see the direct impact will speak on behalf of tax reform.” 

Tags Kevin Brady Mitch McConnell Paul Ryan U.S. Chamber of Commerce
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