This is a rush transcript from "Your World," January 26, 2017. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: These are images taken earlier today on Air Force One of President Trump. I don't think I have seen these type of same-day events. Usually, you get these pictures weeks, months, sometimes years after the fact. This is happening today. That looks like a cool plane. Right?
All right, in the meantime, what looks like a cool idea is all this tax reform stuff you hear, that the White House is serious about getting cracking on it. And now we're hearing from Reince Priebus, the chief of staff, that there is -- I quote here -- a buffet of options on the tax idea, like they knew I would know what that means, buffet, like lots of choices.
All right, House Ways and Means Chairman Kevin Brady.
Congressman, very good to have you.
REP. KEVIN BRADY, R-TEXAS: Thanks for having me.
CAVUTO: So, I guess a buffet of options, a lot of ideas, sir. Is it fair to say you first tackle the corporate tax code? Is that what this is -- the order of events?
BRADY: Not necessarily.
We're obviously moving forward very pro-growth tax reform that covers both dramatically lowering the rates and leapfrogging America back into the lead as far as our business side, but also simplifying the code, so much so that many families will be able to file using a postcard system.
But today I think was very important. What I heard President Trump tell House and Senate Republicans here in Philadelphia was that he's going to fight for American citizens just as hard as others fight for their citizens, and so in tax reform leveling the playing field between imports and exports, just like our competitors do, and ending the made in America tax on our exports, just like our competitors do.
So, clearly, this president is looking at a very bold tax reform approach.
CAVUTO: I'm thinking, going back, since everything is the '80s again, if you will indulge me, sir, and I'm thinking that Theresa May, the British prime minister, kind of likening herself to Maggie Thatcher and Donald Trump, Ronald Reagan.
CAVUTO: So, I guess you're kind of like that pivotal House Ways and Means Committee chief like Dan Rostenkowski, who was working with Ronald Reagan on the big tax cuts at the time.
Do you want to see big tax cuts, both for companies and for individuals? Big ones?
BRADY: We have to go bold, because our competitors have already gone bold.
The truth is, most of our companies are competing with one hand tied behind their backs. So, you need lower -- we're proposing the lowest business rates in modern history, so our businesses can invest back home in a major way.
CAVUTO: Are you in that 15 to 20 percent, sir, 15 to 20 percent, from the 35 to 40 where we are now?
BRADY: Absolutely. Absolutely.
But you have got to redesign the tax system as well. So, we're going very bold there. And part of this is matching what our competitors, China, Europe, Canada, and Mexico do in lowering those rates and no longer taxing their exports.
We propose to do the same thing and leveling the playing field for imports and exports here, just as they do. It's a simple, but a powerful, I would say game-changing tax approach.
CAVUTO: You mentioned on imports too.
And, as you know, what has been bandied about now with paying for this wall on the border is a border tax on Mexican imports to go anywhere from 5 to 20 percent. The White House seems to be saying it's among ideas being considered, but one way or the other, the Mexicans are going to pay for this.
But wouldn't a tax like that, sir, mean we pay for this? Americans are the ones who would pay that.
BRADY: So, what I heard today from this president was the , in tax reform, that they would level the playing field for imports from around the world and level it with the U.S. products here in America at the exact same rate.
So I don't think they were singling out one country over another. And our tax proposal clearly doesn't do that. What we do know is that we have more than 100 competitors that border-adjust their taxes. That means that they have a tax advantage here in America and they have a tax advantage overseas. We can't continue that.
CAVUTO: I understand.
But you would be in favor you would be in favor of a tax on imports, a tariff from any country on Earth, you just haven't settled on what the number would be?
BRADY: Well, actually, we're proposing an equal 20 percent tax rates on imports to the United States, as well as the products here in the United States.
So, for the first time, they would be taxed equally. And basically we revamp our tax code, so it's focused on America. Is your product or service consumed here? If so, it is taxed equally. For the first time, that is incredibly pro-growth.
CAVUTO: But wouldn't we pay that, again? A 20 percent tax, if it were that, yes, they could adjust the price of their goods to reflect or absorb that tax, but don't we, as American consumers, pay that?
BRADY: Well, right now, as you know, our tax code favors imports over exports.
Leveling the playing field, creating true competition, that is always good for the consumers. Plus, I am convinced that this world economy recognizes changes. We will strengthen our made in America exports. Our dollar will appreciate. Import, you will be buying more of the mat a lower price.
I think it balances out in a major way. But, boy, from a pro-growth approach, this leapfrogs America back into that top two or three countries on the planet for the new business investment. And more than that, it creates us as a magnet. I think that's critical reform.
CAVUTO: But I know where your heart is and where the president's heart is. You want more American jobs. You want people buying more American goods.
But by throwing this tax or tariff, whatever you want to call it, do you think that it could reignite trade wars across the globe, that one country says look what America is doing, we're going to do the same, and back and forth, back and forth?
BRADY: Yes. I don't. And here's why.
Our competitors are already doing this. More than 100 countries, China, Europe, Mexico, Canada, are already border-adjusting their taxes. We're about the only one who doesn't.
So, yes, they have a major tax advantage over us in America. Our tax code allows them to have that tax advantage over us, made in America. And so we believe leveling that playing field, equal taxation, it's very hard to argue against that key principle.
CAVUTO: All right, thank you very, very much, Congressman.
There you have it, folks. That is very big news here, the idea that every country with whom we do business is going to be looking at some sort of a tax, the only question, how big of one.
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