“While acknowledging that the particular mechanism must be sorted out with the administration, he will argue that we must fix the current incentive for American countries to move abroad, make things overseas and then sell them back into America — which costs us jobs,” a spokesperson said.
Since Republicans took control of Washington, however, the hurdles to tax reform have grown higher. Lawmakers are still mired in debate over repealing and replacing the Affordable Care Act, commonly known as Obamacare. They must vote on that bill before they can move on to approving a 2018 budget that would open the door to tackling tax reform. In addition, lawmakers are facing a September deadline for raising the nation’s borrowing limit, which is another potentially bruising and time-consuming fight.
But the biggest obstacle of all could prove to be the White House, which has been engulfed by investigations into senior officials’ ties to Russia that have consumed Washington.
“Political setbacks, a lack of consensus on policy priorities, the distraction of fiscal deadlines, and the prolonged consideration of health legislation have delayed consideration of tax reform and diminished expectations of major policy changes more generally,” a Goldman Sachs note earlier this month said.
Still, the investment bank remained optimistic about the potential for a tax package to be enacted, though likely not this year. Goldman Sachs also downgraded its estimate for the size of any tax cuts to $1 trillion over the next decade. IHS Markit also dialed back its expectations this month for how far Republicans will cut the corporate tax rate: from 20 percent as Ryan has proposed to 25 percent.
“If the current political turmoil were to escalate into a full-blown crisis, then the chances of any tax stimulus or reforms being implemented would diminish considerably,” IHS Markit chief economist Nariman Behravesh wrote in a research note.
The White House is also working on a more detailed tax proposal than the one-page outline unveiled in April. On Monday, senior administration staff emphasized during a meeting with the financial services industry that they intended to unveil their plan in late summer or early fall, according to two people familiar with the discussions. Ryan and other members of Republican leadership have met with Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn three times to discuss the framework.