Joint Statement on Tax Reform Issued; BAT Abandoned

Today, House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX) issued a joint statement on tax reform that sets out a broad framework for moving forward on tax reform.

Most notably, the statement announces that tax reform legislation will not include the controversial border adjustment tax (“BAT”) that has been championed by House Republicans.  The group has concluded that without the BAT there is still “a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base,” but does not indicate what that approach may be.  In addition, the statement indicates that the House Ways and Means Committee and Senate Finance Committee will take the lead in drafting tax legislation, with a focus on reducing individual and business rates and with the intent that reform be permanent.  Another goal is to allow “unprecedented capital expensing.”  The statement says the group expects draft tax reform legislation to move through the congressional committees this fall, and hopes that Democrats will participate in the tax reform effort.

Joint Statement on Tax Reform

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