In the spring, Donald Trump’s White House unveiled a one-page outline that he described as a bold tax-reform “plan.” The president gave it far too much credit: the piece of paper was basically a table of contents without the content.
In the months that followed, the administration struggled to get its act together. Trump World intended to pass a tax-reform plan by August. Then it said the plan would by “locked in place” by September. Eventually, the White House assured everyone the president would spend August selling the policy, before unveiling the “full blown” presidential blueprint around Labor Day.
Now, it’s nearly October, and Republicans have only managed to put together something resembling a tax plan.
After months of work, a tax plan released Wednesday by the White House and House Republicans would provide large tax cuts to both corporations and individuals. The highly-anticipated proposal still has a long ways to go before it can be voted on but Republicans outlined their objectives in a nine page document this morning.
The plan includes long-held Republican goals of reducing the corporate tax rate and simplifying the tax code. It lowers the corporate tax rate to 20 percent and eliminates four income tax brackets. It doubles the standard deduction and increase the child tax credit. It also repeals the estate tax but keeps the deductions for mortgage interest and charitable giving, all tax breaks that tend to impact high-income tax payers. But it is expected to cost trillions of dollars and Republicans haven’t yet presented a clear way to pay for it.
Here’s the full “framework,” put together behind closed doors by the Republicans’ “Big Six” – Paul Ryan, Mitch McConnell, Kevin Brady, Orrin Hatch, Gary Cohn, and Steve Mnuchin – in recent months. It’s nine pages, but it’s still more of a public-relations document than a legislative proposal. The first page is a cover sheet, and pages six and eight have very little text. It reads like a plan to write a plan.
What’s more, the blueprint, such as it is, fails to actually make any tough choices. The hard part of an endeavor like this is making trade-offs – identifying tax loopholes that should be closed and breaks that can be eliminated – that make the whole package affordable. At least for now, Republicans have punted on the part of their endeavor that’s difficult.
In other words, they’re eager to tell you about the trillions of dollars in tax cuts they’re eager to pass, but if you ask how they’ll pay for it, the answer is effectively, “We’re working on it.”
Martin Sullivan, the chief economist at Tax Analysts, called this “Cheez Doodle reform,” featuring “lots of puff and color. but mostly air.”
Putting aside what isn’t in the vague and incomplete plan, what is in the plan is a rather predictable laundry list of Republican goals. The “framework,” for example, intends to slash the corporate tax rate, eliminate the estate tax for millionaires and billionaires, and to the delight of the higher-end earners, repeals the Alternative Minimum Tax.
There’s obviously a lot more to it, but I’m reluctant to dig too deeply into a plan that, by its architects’ admission, isn’t finished. Dylan Matthews has more patience than I do, and his dive into the blueprint is worth your time.
The bottom line remains roughly the same: after several months of secret and partisan work, GOP leaders want to cut taxes in a way that largely benefits the wealthy, and they don’t know how to pay for it. That’s roughly where they were when they started.