Republicans Still Have No Idea What the White House Is Doing on Tax Reform – Vanity Fair
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Still reeling from last weeks health-care disaster, Republicans are scurrying back to more comfortable territory: cutting taxes. Weve had our vote, and were moving on to tax reform, John Thune, the third-ranking Republican in the Senate, said. But after months of promising to overhaul the tax code by the end of the year, the Trump administration has yet to provide a clear, detailed tax-reform plan, leaving rank-and-file Republicans in the dark and the party at risk of repeating the same mistakes that killed Obamacare repeal. There is no detail, Representative Ted Yoho said in an interview. It is a problem.
When Donald Trump unexpectedly won the Oval Office last November, the Republican Party was given the greatest opportunity in 30 years to re-write the tax code. But six months into the new administration, the G.O.P.s tax plan remains inchoate. As the health-care debate was roiling Capitol Hill, the so-called Big Six Speaker of the House Paul Ryan, Ways and Means Committee Chairman Kevin Brady, White House economic adviser Gary Cohn, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, and Senate Finance Committee Chairman Orrin Hatchreleased a six-paragraph statement on Thursday that lacked any real policy minutiae. A few vague paragraphs isnt even a broad strokes proposalits more like finger painting, Rep. Sander Levin complained. One tax lobbyist echoed the sentiment to Politico: This literally started as principles yesterday and morphed into mindless pablum in 24 hours.
The statement did provide clarity on the controversial border-adjustment taxdefinitively stating that it will not be included in the tax-reform plan. Ryan and Brady championed the idea earlier this year, pitching it as a way to collect as much as $1 trillion in revenue to offset tax cuts elsewhere. But Ryan caved after critics blasted the policy as a tax on consumers. [Ryans] top priority is getting meaningful tax reform done, a House Republican aide told Politico. He had no interest in holding up reform over this one policy, no matter how right he believes it to be.
But beyond settling the dispute over the border-adjustment tax, it is unclear how the Trump administration and Congressional leadership intend to offset the massive tax cuts the president has insisted will be included in the tax-reform plan. There are so many other questions, Mark Meadows, the chairman of the arch-conservative House Freedom Caucus, told Bloomberg. We need a lot more level of detail before you can opine on whether its good or bad.
It remains unclear, for instance, how low the corporate tax rate can realistically go. The House Republican tax plan includes a corporate tax rate of 20 percent, while Trump had been pushing for 15 percent. Hatch, however, characterized the presidents proposal as very unlikely In an interview with Reuters. In fact, it would be kind of miraculous if we could get it down to 25 percent or less. Id like to get it down to around 20 percent. Id love to get it at 15 percent if we could, the Utah Senator added. But I think the odds are, were going to be lucky to get it down at all.
Much like they did on health care, the Republicans are not likely to have much Democratic support. In a letter to G.O.P. leadership and Trump on Tuesday, signed by 45 of the 48 members of the Democratic caucus, Minority Leader Chuck Schumer wrote that they would not back any tax-reform bill that added to the deficit or provided tax cuts to the countrys most affluent. Tax reform cannot be a cover story for delivering tax cuts to the wealthiest, the letter reads. We will not support any tax plan that includes tax cuts for the top 1 percent.
McConnell has said that he intends to tackle tax reform through budget reconciliation, which would allow him to pass a bill along party lines. And while the Kentucky senator will likely face many of the same obstacles as he did on health careuniting the conservative and moderate factions of the Republican Partygetting to 50 votes might be slightly easier if the three Democrats who didnt sign Schumers letterSenators Joe Manchin, Joe Donnelly, and Heidi Heitkampbreak ranks. But with so few details at this stage, it is hard to say how difficult of a lift Ryan and McConnell will face. As William Gale, a tax-policy expert at the nonpartisan Brookings Institution, explained to Bloomberg, Distance is a tax reforms best friend. Once you look at it up close and see the things you have to do, people shy away from it pretty quickly.
The White House, for its part, is pressing ahead, with or without a clear idea of where its going. At a political event hosted by two conservative groups tied to the Koch brothers, Legislative Director Marc Short said a tax plan would be introduced in the House in October and make its way through the Senate in November. So that, I think, is an aggressive schedule, but that is our timetable, Short said, according to Politico. I think were in for a long fall, legislative calendar-wise.
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Republicans Still Have No Idea What the White House Is Doing on Tax Reform - Vanity Fair
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