Trump Tax Plan Set for Slowed Timetable
The Trump tax plan, which was being pushed as something that could be passed by this August, now appears to be in jeopardy. Tax reform is a difficult topic and it appears that the Trump administration is going back to the drawing board to rework the plan into something that can gain wider consensus in Congress compared to the original plan that’s been floated for months.
This report from the Associated Press:
President Donald Trump has scrapped the tax plan he campaigned on and is going back to the drawing board in a search for Republican consensus behind legislation to overhaul the U.S. tax system.
The administration’s first attempt to write legislation is in its early stages and the White House has kept much of it under wraps. But it has already sprouted the consideration of a series of unorthodox proposals including a drastic cut to the payroll tax, aimed at appealing to Democrats.
Some view the search for new options as a result of Trump’s refusal to set clear parameters for his plan and his exceedingly challenging endgame: reducing tax rates enough to spur faster growth without blowing up the budget deficit.
Administration officials say it’s now unlikely that a tax overhaul will meet the August deadline set by Treasury Secretary Steve Mnuchin. But the ambitious pace to figure out a plan reflects Trump’s haste to move quickly past a bruising failure to broker a compromise within his own party on how to replace the health insurance law enacted under President Barack Obama.
What this tells me is that a valuable lesson was learned by the Obamacare repeal debacle a few weeks ago, and Trump doesn’t want to suffer another embarrassing legislative defeat, possibly at the hands of his own party. Tax reform is something that can have bipartisan support, but it will take a slowed process of consensus building and horse trading to craft a bill that can have a strong chance for success in the House and Senate. This sort of thing can’t happen in days or hours, it must be worked over time to include as many voices in the process as want to come to the table.
Legislating can be hard, especially given the factions within each party. However, with Trump having been a “trial and error” type of campaigner, it seems that he will take a similar approach to governing. The first legislative push failed, so they’re approaching the next one differently. Trump will be more satisfied with a victory, even if that victory comes with a delay as opposed to quick defeat.
White House aides say the goal is to cut tax rates sharply enough to improve the economic picture in depressed rural and industrial pockets of the country where many Trump voters live. But the administration so far has swatted down alternative ways for raising revenues, such as a carbon tax, to offset lower rates.
Trump, who brands himself as a deal-maker, has not said which trade-offs he might accept and he has remained noncommittal on the leading blueprint, from Rep. Kevin Brady, chairman of the Ways and Means Committee.
The latest possible deadline for tax reform and/or tax cuts is probably until the end of this year. Much later and the process will start getting caught in the gears of the 2018 midterms. Republicans will have to show voters something of substance as proof that handing them the reigns of the government can produce results. Democrats will be seeing this as an opportunity if it ends as badly as the ObamaCare repeal bill.