U.S. House of Representatives Speaker Paul Ryan on Thursday rejected speculation that future tax legislation could include temporary tax cuts for businesses, saying macro-economic elements of tax reform including rates must be permanent.
“We very passionately believe that permanence is very, very important. So the big decision-making provisions in the tax code? – That stuff’s got to be permanent,” Ryan said in an interview with CNBC television.
“There are other things you can do that can have time dates on it, to make sure that the numbers work. But the big macro-economic policies – the rates and things like that – that stuff has to be made permanent.”
Ryan also said Republicans intend to keep a popular homeowner deduction for mortgage interest payments that some have talked about capping to help pay for tax cuts. But he indicated the deduction could change.
“We recognize, acknowledge and believe you need to maintain the mortgage interest deduction. Whether it can be improved and how it works, that’s a discussion we’ll have on an ongoing basis,” Ryan said.
President Donald Trump and Republicans in Congress have vowed to slash business tax rates and overhaul the U.S. tax code before year end, with a Republican-only strategy that requires a special parliamentary procedure to get legislation through the Senate on a simple majority. Republicans control the Senate by only a 52-48 margin.
But they have struggled to find ways to pay for lower rates without violating Senate rules by expanding the federal deficit outside a 10-year budget window.
Lobbyists say closed-door discussions between Congress and the Trump administration have considered an approach that would make tax cuts sunset after a decade, avoiding a Senate rule violation.
But without permanent tax rates, Ryan said that businesses would be less likely to make the multi-year, multibillion-dollar investments necessary for driving economic growth, which Republicans say is their ultimate goal.
“Permanence works, permanence is necessary and permanence is absolutely doable.”
Reporting by David Morgan and Mohammad Zargham; Editing by James Dalgleish