Senate Majority Leader Mitch McConnell on Tuesday said tax reform will have to be “revenue neutral” but that an import tax outlined by House Republicans probably wouldn’t pass the Senate, which could leave lawmakers tasked with finding another way to raise about $1 trillion over 10 years.
Mr. McConnell also said he didn’t want to put a strict timeline on things, but that he’d like to try to finish tax reform during “this Congress.”
“It will have to be revenue neutral,” Mr. McConnell said in an interview with Bloomberg TV, saying there was an enormous amount of money added to the national debt during the administration of former President Obama.
Mr. McConnell also said a trillion-dollar tax on imports as envisioned by House Republicans “probably wouldn’t pass the Senate,” but said he and others like Speaker Paul D. Ryan are currently negotiating. The so-called “border adjustment tax” is a crucial revenue-raiser in the House GOP tax blueprint.
Mr. McConnell said he didn’t want to put a “strict timeline” on when something can pass, but said he’d “certainly want to try to complete it this Congress.”
He pointed out the last serious effort at comprehensive tax reform took several years.
Some conservatives, as well as Treasury Secretary Steven Mnuchin, argue that projected economic growth can largely make up for any immediate revenue loss from lowering tax rates.
But Republicans could be constrained on what they can do on tax reform if the legislation they settle on adds to the deficit beyond a window of about a decade or so and budget scorekeepers aren’t as optimistic about its effects on the economy.
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