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Gary Cohn: Tax reform must be permanent and balanced

Washington Examiner

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Washington, August 4, 2017 | comments


President Trump's top economic adviser said Friday that a temporary tax cut is not good enough, and that Congress has to pass comprehensive tax reform that is permanent and doesn't add to the deficit.

"We need to do permanent tax reform in the United States. The way you do permanent tax reform in the United States is you have it balance over 10 years," said National Economic Council director Gary Cohn, speaking on Fox Business.

While in talks with congressional Republicans about how to pass tax reform, the Trump administration has so far stopped short of committing to a permanent change in the tax code. For procedural reasons, a permanent overhaul of the tax code cannot lose revenues for the Treasury, making the task of shepherding it through Congress significantly harder.

On Friday, though, Cohn strenuously pushed back against the suggestion that the administration would go the easier route of a temporary tax cut. Cohn is one of the "Big Six" of administration officials and congressional Republican leadership that has been discussing a tax plan.

"We're working toward real tax reform as well as major tax reduction in the United States," he said.

House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady have stressed the importance of permanence in tax reform, and say it needs to provide businesses with the ability to plan years ahead to make major investments.

The political difficulty, though, is that if losing revenues is not an option, lawmakers must eliminate tax breaks in order to lower tax rates. Each deduction, credit, or preference has support from lobbyists.

To make the numbers add up, Republicans plan on counting on the reform to boost economic growth and accordingly tax revenues.

"Growth in the future will help us pay for tax cuts," Cohn said.

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