Trump’s pivot to taxes may be fraught with pitfalls

WASHINGTON—President Donald Trump is planning to kick off one of the most important sales pitches of his presidency this week—getting Americans fired up about rewriting the U.S. tax code.

But there’s no plan to sell. Basic questions remain unanswered. Will the changes be permanent or temporary? How will individual tax brackets be set? What rate will corporations and small businesses pay?

Instead of providing details that could help build support for a bill, the president will largely rely on the same talking points he and his advisers have highlighted since January: The middle class deserves a tax cut and businesses need changes to help them compete with global rivals.

Treasury Secretary Steven Mnuchin—who earlier predicted having a tax bill done by August—revealed the enormity of the task ahead on Friday: He didn’t commit to completing it by year’s end.

“They’re nowhere. They’re just nowhere,” said Henrietta Treyz, a tax analyst with Veda Partners and former Senate tax staffer. “I see them putting these ideas out as though they’re making progress, but they are the same regurgitated ideas we’ve been talking about for 20 years that have never gotten past the white-paper stage.”

Treyz said congressional tax staffers she’s spoken with are despondent over what they call an unexpectedly grim situation. There’s “animosity” between Republican leaders and their members, and between House and Senate Republicans, she said. Mistrust between congressional Republicans and Trump has been exacerbated by his recent attacks on key GOP senators.

“Our team has been working with the White House and the Senate to ensure we are all moving in one direction to reach this important goal,” said Emily Schillinger, a spokeswoman for House Ways and Means Chairman Kevin Brady.

Administration officials and congressional leaders met periodically this summer to negotiate a tax framework—an attempt to avoid repeating the failed attempt to repeal the 2010 Affordable Care Act.

The result was a two-page “statement of principles,” released in July. It contained one big decision—ruling out a controversial border-adjusted tax that House Speaker Paul Ryan had championed—but left other crucial questions unanswered.

Trump administration officials had promised a unified tax plan by early September—catching GOP congressional leaders by surprise, and leaving members confused and irritated, said three people familiar with the situation. The White House has since abandoned that promise; it said last week that details will be up to the tax-writing committees in the House and Senate.

Those panels must decide how to raise trillions in revenue to pay for the massive tax cuts the White House has promised, and which deductions and loopholes to eliminate. It’s possible that two different plans could result, with neither gaining the White House’s full support.

“There’s no indication that either the White House or congressional leaders learned anything from their repeal and replace debacle,” said Stan Collender, a former budget aide for congressional Democrats.