Business Sees Tax Overhaul, Fewer Regulations Under Trump

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By Cheryl Bolen

Nov. 9 — Business is set to fare well under a Trump administration, with early action expected on corporate tax overhaul and fast deceleration of regulatory activity, John Engler, president of the Business Roundtable, told Bloomberg BNA.

Following a bruising election, Republican Donald Trump emerged victorious in the early morning hours of Nov. 9, much to the surprise of most political observers and pollsters who had predicted a win by Democrat Hillary Clinton.

Trump’s policy statements are now coming under scrutiny by business groups, which stand to benefit from a more business-friendly administration aided by a House and Senate controlled by Republicans.

In an early-morning speech to his supporters, Trump again vowed major infrastructure improvements in the U.S. that would be second to none. Throughout his campaign, Trump also vowed to overturn government regulations that he said killed jobs and slowed economic growth (see related story in this issue).

Tax Overhaul Eyed

The Trump administration will work closely with the House, where tax bills start, and both Speaker Paul Ryan (R-Wis.) and Ways and Means Committee Chairman Kevin Brady (R-Texas) are ready to go, Engler said.

“So we’re pretty optimistic there, and that’s something that could be ready to go pretty early on,” he said.

Tax overhaul would then open the door to how to approach infrastructure, Engler said. Trump will probably be much more interested in how to maximize private capital, as opposed to having the government try to do everything through an infrastructure bank, he said.

When it comes to trade agreements, Trump isn’t hostile to trade, but wants fair trade and better agreements, Engler said. However, that is dwarfed by his commitment to economic growth, and when his administration starts to run the numbers and look at the data, he will find that growth would slow by undoing trade agreements, he said.

Moreover, the Trump administration is “going to take the foot off the regulatory accelerator,” Engler said. There are a number of regulations that have been struck down in court and sent back to the agency for reworking.

“I would expect those to fall by the wayside,” he said.

Changes in Judiciary

“Long term, one of the things that is a positive in terms of the economy is the potential for a Supreme Court that will not be completely deferential to agency action,” Engler said.

The Obama administration has tried to do a lot by executive order, in some cases going so far as to rewrite the intent of a particular statute, Engler said. A court that comes back and begins to look at rules a bit more skeptically is probably in the nation’s interest, he said.

The kind of judges and justices that a President Trump will appoint are probably going to be a little bit different than those who would have been appointed in a Clinton administration, Engler said.

Grim Time for Fiscal Hawks

William Galston, chair of the Brookings Institution Governance Studies Program, said the structure of a tax overhaul plan is one question for Republicans, but the other is how much revenue they are prepared to give away.

The most modest estimate of Trump’s tax plan is $4.5 trillion over 10 years, combined with a huge infrastructure plan that has no specific pay-fors, Galston said.

“If you add together the massive infrastructure pledge with tax reform, you’re talking about blowing a hole in the budget that it’s hard to see how it would be plugged,” he said.

Over the course of his campaign, it has been difficult to put together the pieces of Trump’s domestic and fiscal policies into a coherent whole that won’t send the country into a fiscal tailspin, Galston said.

“This is going to be a grim time for fiscal hawks,” he said.

Manufacturers Pledge Support

The National Association of Manufacturers released a letter from more than 1,100 manufacturing and business leaders pledging to help bring the country together after a divisive election.

Manufacturers want the next president to “stand tall on the world stage” and stand up for America’s entrepreneurs, the statement said.

“We will do our part, sharing our ideas and our expertise with President-elect Trump and the 115th Congress to lead by example and set a productive tone for this next chapter in our nation’s history,” the letter said.

Chamber Cites Election Successes

U.S. Chamber of Commerce President and CEO Thomas Donohue congratulated Trump in a statement, but acknowledged the “bitter, personality-driven campaign” that exposed deep divisions in the country.

Now, the Chamber and its members stand ready to help the new administration and the next Congress unite the country around efforts to grow the economy, create jobs and lift incomes for all citizens, Donohue said.

“The number one goal of the Chamber’s political program this cycle was to save the pro-business majority in the Senate,” Donohue said. “Yesterday voters agreed, and chose pro-business majorities in the Senate and the House to represent them in Washington.”

To contact the reporter on this story: Cheryl Bolen in Washington at cbolen@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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