Top Republicans from Congress and the Trump administration vowed on Tuesday to complete tax reform by the end of 2017, despite party infighting and political distractions from investigations of alleged Russian meddling in the 2016 election.
In a speech to U.S. manufacturers, House of Representatives Speaker Paul Ryan said President Donald Trump and the Republican-controlled Congress hoped to complete the job in the autumn, with a new tax system in place by the beginning of 2018.
The goal is to get tax legislation to the floor of Congress during the first two weeks of September, Trump economic adviser Gary Cohn told technology industry representatives at the White House.
Republicans are promising the biggest tax overhaul since the Reagan era, saying a simplified system with tax cuts for individuals and businesses, along with reforms to eliminate taxes on the foreign profits of U.S. corporations, can boost economic growth and create jobs.
Independent analysts say there is no evidence that tax cuts drive long-term economic growth. Democrats contend that the Republican tax measures are designed to benefit wealthier Americans.
"I am here to tell you we are going to get this done in 2017. Why are we going to get this done in 2017? Because we need to get this done in 2017," Ryan told a conference hosted by the National Association of Manufacturers, a powerful Washington lobby group.
"This will create jobs. That is what this is all about, jobs, jobs, jobs, good-paying jobs," he said.
The effort has drawn warnings and criticism from Democrats. Senate Democratic leader Chuck Schumer said Republican moves to grant new tax breaks to the wealthy could jeopardize Democratic support for an increase in the government's borrowing authority later this year.
Shortly after Ryan's speech, House Democratic leader Nancy Pelosi's office called his remarks “a poor attempt to distract” from a lack of Republican initiatives on job creation.
The Trump administration and Republicans in Congress face mounting pressure from U.S. businesses and their electoral base to deliver tax reform, a top 2016 campaign pledge that could determine whether Republicans retain control of Congress in the 2018 midterm elections.
It was not clear whether Republicans can overcome infighting over healthcare legislation and government spending to move forward on tax reform.
Earlier in the day, Vice President Mike Pence assured the same audience that tax reform would be done this year, in remarks echoed by Treasury Secretary Steven Mnuchin in a CNBC television interview.
Ryan and Mnuchin are among six officials trying to craft a tax deal in closed-door discussions with Cohn, Senate Republican leader Mitch McConnell and the Republican chairmen of two tax committees.
“We’re comparing and contrasting various versions of reform to get the best possible one that gives us the lowest possible rates and most internationally competitive tax system, and the best one we can pass," Ryan told CNBC after his speech.
The Nasdaq Composite is up nearly 20 percent while the S&P 500 has added 14 percent since Trump's election in November, as investors bet he would spark economic growth by cutting taxes and boosting infrastructure spending.
The Trump administration and Republican leaders in Congress have agreed that tax reform should eliminate estate and alternative minimum taxes, both levies on the wealthy. They also want to allow U.S. corporations to repatriate trillions of dollars in profits held overseas at a reduced tax rate and eliminate taxes on future foreign profits. (Additional reporting by Roberta Rampton and Richard Cowan; Editing by Jeffrey Benkoe and Peter Cooney)
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