Treasury chief says US can achieve 3 percent economic growth

With Tax Reform, Save the Forest Rather Than Cut Down Trees

"I think as time passes, tax reform is going to look much different, that it may be begin to look more like tax cuts than tax reform".

"That's all good. But we also need to do something on the demand side - of putting people in a position to earn higher wages so they can spend more and get the economy growing faster", said Rattner, who led efforts under President Obama to restructure the vehicle industry after the financial crisis.

The examined a tax proposal shares many similarities to the White House's "Better Way for Tax Reform".

That is the cardinal sin of President Trump's one-page proposal, released last month, which also would worsen after-tax income distribution.

During the hearing, remarks from Democrats on the Ways and Means Committee signaled no desire to cooperate with the GOP's tax plans. Congressional Republicans have bemoaned that the scandals in the Trump White House are taking time away from their agenda.

The White House website maintains that their proposed tax reform will ultimately cut taxes for low and middle income households, although at this stage it is unclear as to how their proposed tax reform will effect home owners and the housing market at large.

The Republican tax plan would adjust the corporate tax code in several ways.

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The plan includes a 15 percent corporate tax rate - a 20 percentage-point drop from the current rate - along with the elimination of all tax deductions except for mortgage interest and charitable giving. Businesses would no longer need to pay income taxes on overseas profits, but they could no longer be able to deduct interest as a business expense. Essentially, it taxes goods based on where they end up, not where they are produced.

This aspect of the House plan has sparked criticism because businesses that rely on cheap imports - a lot of big-box retailers - would be hit hardest. Or if the proposed solutions to pay for the business rate cuts fall on ordinary people. Based on that, they expect agreement on a smaller tax cut, amounting to $1 trillion over 10 years, instead of the $1.75 trillion plan they had previously assumed. Self-described "Wall Street guy" Rattner served as leader of the 2009 Obama Administration auto bailout task force under the supervision of Treasury Secretary Tim Geithner and Chief Economic Adviser for the White House, Larry Summers. Other facets of the current system have led USA companies to keep more than $2.6 trillion in foreign earnings offshore to defer the US taxes they'd owe on that profit. Why are we taxing income?

"There is no industry that wants tax reform more than retail", said Brian Dodge, RILA spokesman, to CNBC.

Peterson pointed to a need for lower corporate tax rate to level the playing field and increase US competitiveness internationally. American consumers could pay as much as 30 to 40 cents more per gallon of gas if Congress imposes a BAT tax.

This is the tonic that will restore capital formation, productivity, real wages, and growth. But many Republicans have said they can live with a reform package that isn't.

Rep. Peter Roskam (R-Ill.), chairman of the panel's tax policy subcommittee, asked the five business leaders testifying at the hearing to gauge the value of permanent policy changes.

For the first time in three decades, US lawmakers have an opportunity to reform the tax code to foster GDP growth, boost wages and employment, attract greater foreign investment, and discourage inversions. But the core of the tax bill is a simple three steps: a deep corporate-tax-rate cut, immediate expensing for new equipment of all kinds, and the repatriation of offshore cash. Are you concerned about this, or are you among those who says, "Let it flow; if the deficit increases, it will essentially bring about economic growth"? This was the principle that governed the last successful comprehensive tax reform, under President Ronald Reagan in 1986, and adherence to it is one of the few ways this reform could retain any hope of being bipartisan like that one was.

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