Larry Kudlow, the economics guru and former adviser to President Ronald Reagan, said President Donald Trump’s tax reform push is still possible this year if the administration can rally the same kind of support that was seen in last year’s election.
Kudlow was asked for his opinion on a Tuesday report in The Wall Street Journal that said “the boldest ideas for changing the nation’s tax code are either dead or on political life support” because of delays in Congress.
“What I'm told is they are working on a deal,” Kudlow said on CNBC. “The administration has talked to the House and the Senate. The Senate is a little bit behind on taxes, I’ll grant you that. They're not going to get it done before the August recess. They will get health care done before the August recess.”
Trump campaigned on a pro-business platform of tax cuts, less regulation and jobs growth. Stocks have jumped to record highs since his upset election as investors look forward to the possibility of better economic growth.
“The GOP’s dreams have collided with interest-group lobbying and the tax system’s reality,” the WSJ reported. “Politicians all profess to hate the tax code, but they don’t agree on exactly what they hate. Voters gripe about complexity but are wary of losing cherished breaks that are woven into the economy.”
Kudlow said it’s imperative for Republicans who control both houses of Congress to show some positive economic results by the time they start running in mid-term elections next year.
“Can they get tax reform in the fourth quarter? I don't know. Close call. If not, they have to do it in the first quarter,” Kudlow said. “If they don't and the economy doesn't pick up palpably they're going to get their brains beaten in the 2018 mid-terms. That's all.”
The WSJ reported that Republicans are looking for ways to cut taxes without triggering deeper deficits.
Republicans “are scouring the tax code, searching for ways to offset the deep rate cuts they desire. But their proposals for border adjustment—which would tax imports—and for ending the business interest deduction and making major changes to individual tax breaks for health and retirement have all hit resistance within the party,” according to the newspaper.
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