President Trump's top economic adviser says the administration wants tax changes to be permanent — a goal that could be more difficult to achieve if tax cuts increase the deficit.
“We would like to have permanence to tax,” White House National Economic Council Director Gary Cohn said at an Institute of International Finance event on Thursday.
Several people who advised Trump’s presidential campaign argued in a New York Times op-ed on Wednesday that the administration should not overhaul the entire tax code in one bill and should instead first tackle business tax cuts that would not be revenue-neutral.
But if Congress moves to pass tax legislation with only Republican votes using the reconciliation process, it will need a bill that doesn't increase the deficit after 10 years. A tax cut bill that lowers federal revenues would need to have Democratic support to pass the Senate or expire after a decade.
Cohn said that the administration doesn’t want to see business tax cuts expire. Corporations making big investments “need some permanence on the tax code.”
“The more permanent we can make the tax code, the more it makes sense to us,” he said. “Running a big deficit in the tax code would potentially make it not permanent.”
But Cohn also said, “we have to do what we need to do to drive job creation and drive the economy.”
Cohn said that the White House tax plan would include changes to both the individual and corporate tax systems.
He also said that Trump’s tax plan might involve using some tax revenues from businesses repatriating foreign earnings for infrastructure.
Some lawmakers and conservative thinkers have supported linking tax reform and infrastructure, since doing so could make legislation more attractive to Democrats. But others, including Americans for Tax Reform President Grover Norquist, have said that the two issues should not be connected because doing so could make tax reform harder.
The Washington Post earlier this month reported that the White House was considering the possibility of a carbon tax. But Cohn pushed back on that idea, saying that a carbon tax is “not in our mix.”