Trump's tax plan has aggressive timeline but no details

By Josh Boak
AP Economics Writer

WASHINGTON (AP) — The Trump administration started its public push Monday to overhaul taxes but, just as with health care, the White House lacks a detailed plan to promote to voters.

What it has, instead, is an aggressive deadline.

The White House hopes to have the House pass a tax overhaul in October that the Senate could then approve in November, said Marc Short, the White House director of legislative affairs. Under this plan, President Donald Trump would travel the country to rally support for the intended tax cuts, while conservative activists and business groups act as valuable allies to encourage and pressure Congress into clearing the first major tax code rewrite since 1986.
Short said the strategy comes from lessons learned in the troubled attempts to repeal and replace the 2010 health insurance law signed by President Barack Obama, an ongoing frustration for Trump.

“In the health care battle, there was not an organized effort to bring on board a lot of the conservative grass-roots organizations in support,” he said at a panel at the Newseum. “But there has been in tax reform.”

The panel was sponsored by Americans for Prosperity and Freedom Partners, two conservative groups supported by billionaire industrialists Charles and David Koch. Americans for Prosperity is having its state chapters call lawmakers this summer to encourage support for the overhaul. Separately, the Business Roundtable, an association of CEOs, is sponsoring a multimillion-dollar radio and TV ad campaign.

The outreach is occurring even though key elements of the tax overhaul are still unknown. Trump and Republican lawmakers agree on broad contours such as the importance of a simpler tax code, a lower corporate rate and financial relief for the middle class, but the details of an overhaul remain murky.

The Trump administration released a one-page set of goals in April, followed by a joint statement released last week with congressional leaders.

As of now, the administration can’t say for sure if the tax cuts would increase the budget deficit. It can’t say how large of a break a typical taxpayer would receive. It can’t say how it would prevent wealthy individuals from setting up tax shelters to take advantage of a reduced corporate rate. And while the White House has pushed to reduce the top corporate tax rate to 15 percent from 35 percent, officials can’t say if the rate will end up being that low in the plan.

Each of these unknowns could thwart a tax overhaul. The Trump administration has said it would remove deductions in order to lower rates, but those deductions generally have supporters who will fight to preserve them. House Republicans already dropped plans for an import-based tax system to help lower national rates after pushback by retailers and groups such as Americans for Prosperity.

Despite those uncertainties, the administration says the effort has universal support from Republican lawmakers.

“We are now in what I would say is a 100 percent coherent place,” Gary Cohn, the president’s top economics aide,said Monday at a White House meeting. “We have total agreement on major, major issues.”

White House spokeswoman Sarah Huckabee Sanders said at Monday’s news briefing that the administration is “working hand and glove” with congressional committees on tax overhaul, but she did not say whether the White House would support whatever measure comes out of the committees.

Tax experts say the administration has raised expectations of a tax overhaul without providing much of a roadmap for how it can happen, possibly setting voters and companies up for disappointment if the tax cuts prove to be modest or the overhaul leads to higher taxes for some.

William Gale, a senior fellow at the Brookings Institution and an economist in George H.W. Bush’s White House, said it appears that little progress has been made since the administration unveiled its tax goals in April.
“They have agreement on tax principles at the same level that they had agreement on repealing and replacing Obamacare, which is no real agreement at all,” Gale said.