Legislative Activity
Administration Indicates Turn to Tax Reform after Healthcare Fails, Potentially Moving Up Focus on Infrastructure
The Trump Administration has indicated it will now turn to a comprehensive tax reform effort, as the House Republican’s healthcare reform proposal failed last week. The high-profile American Health Care Act (AHCA) failure showed starkly the divisions within the Republican Caucus in the House that may increase the difficulty of passing the Administration’s other priorities, including comprehensive tax reform legislation and a large-scale infrastructure package. However, the end of this healthcare reform effort seems to have moved up the timing of the tax reform and infrastructure measures.

While the Administration has provided few details on its expected large-scale infrastructure package, the most likely legislation to carry revenues needed to pay for the legislation would be comprehensive tax reform. President Trump has recently signaled his willingness to partly fund infrastructure investment through a repatriation tax holiday whereby earnings held abroad by U.S. companies would be taxed at a lower rate when brought back to the U.S. during the period of the tax holiday.