Six Republicans in leadership positions with respect to tax policy - Ryan, McConnell, Mnuchin, Cohn, Hatch, and Brady - have now issued a public statement regarding their plans for significant tax legislation, which they call "tax reform." It appears to promise a more open, conventional, and committee-based process than that which the Republicans used with respect to healthcare. Other than that, here is the key paragraph, broken down sentence-by-sentence with my annotations after each:
"We have always been in agreement that tax relief for American families should be at the heart of our plan."
"We also believe there should be a lower tax rate for small businesses so they can compete with larger ones, and lower rates for all American businesses so they can compete with foreign ones."Comment: This appears to mean that the self-employed, even if they are extremely high-income, will pay lower tax rates than employees. I've commented previously on what a poor design feature this is. But there is admittedly an underlying dilemma here. All else equal, it might make sense to align the tax rates of small business and large business. And it might make sense to lower the tax rates for internationally mobile capital income insofar as it is only lowering the "normal" rate of return. But it makes no sense to tax employees at higher tax rates than the self-employed, and it's also likely to be extremely regressive. There are indeed ways out of the box, but they generally would require more significant structural changes than these folks appear to be contemplating at this point.
"The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas."
"And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base. While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform."