House Speaker Paul Ryan (R-WI) on June 20, 2017, made the case for enacting comprehensive, permanent tax reform legislation in 2017, and said lawmakers are currently trying to decide on the best version of tax reform in terms of low rates and an internationally competitive system, and "the best one we can pass."

In a speech at the National Association of Manufacturers 2017 Manufacturing Summit, Speaker Ryan said, "US companies are leaving to become foreign companies, when it should be the other way around." He referenced the border adjustability proposal that is part of the House Republican Blueprint on tax reform in saying the country must begin thinking differently so that it can again make things here and export them around the world. "There are a number of ways to achieve this — we in the House have our own idea — and that is one of the things that we are discussing with the Administration," Speaker Ryan said.

In a CNBC interview following the speech, Speaker Ryan repeated previous comments that House Republicans never intended for border adjustability to fully take effect on day one because they don't want the currency to have to appreciate 25% overnight. "So we don't want to do things that severely disrupt companies … ," he said. "What we want to do, though, is we want to have international tax reform that is lasting and endurable, that puts America at a good competitive advantage going forward." Ways and Means Committee Chairman Kevin Brady (R-TX) has suggested a five-year phase in of the border adjustability proposal.

Ryan acknowledged that, without border adjustability, there would be a revenue gap that would have to be filled and the need for alternative anti-base erosion rules under a territorial system. "So what we are doing right now, the tax writers, is we are just comparing and contrasting various versions of reform to get the best possible one that gives us the lowest possible rates and the most internationally competitive tax system, and the best one we can pass," Speaker Ryan said. "That's the analysis we are going through right now. We are going to stick the landing because we know we've got to. And that's why I'm really confident that at the end of the day we are all going to agree on how to do this."

In the speech, Ryan emphasized the importance of moving the United States to a territorial system of taxing foreign earnings in saying that the country cannot accept a system that perpetuates the drain of American businesses overseas. "Part of this is moving to what we call a territorial system that reverses this trend of corporate inversions," Speaker Ryan said.

The Speaker outlined some goals for tax reform that are consistent with the plan outlined by the Trump Administration on April 26, 2017, including eliminating the estate tax and Alternative Minimum Tax; clearing out "special interest carve outs and excessive deductions," and focusing on keeping tax provisions for home ownership, charitable giving, and retirement savings; and consolidating the existing seven brackets into three and doubling the standard deduction.

He also spoke in favor of permanent rather than temporary tax policy. "Every expert agrees that temporary reforms will only have a negligible impact on wages and economic growth," Ryan said. "Businesses need to have confidence that we will not pull the rug out from under them."

The Speaker's remarks come amid negotiations on tax reform between House and Senate Republican leaders and the White House, with the Administration saying it expects to have a tax reform plan with congressional buy-in readied by the end of the August recess. "President Trump recently introduced a set of principles for tax reform, and right now we — the House and Senate — are working with the Administration to turn them into a transformational tax reform plan," Ryan said today.

The Speaker's prepared remarks are attached.

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ATTACHMENT

Ryan Speech