WHAT'S AT STAKE ON TAX REFORM? AND WHY THE PRESIDENT WANTS IT SO BADLY ...
As evidenced by his Twitter feed on a hectic Wednesday, President Donald Trump really, really wants Congress to put a tax reform bill on his desk ASAP. And he's smart to demand that: Tax reform could be intricately tied to Republicans' political future, especially in the 23 congressional districts they hold that Hillary Clinton also won.
It's a problem Republicans in Congress acutely recognize, too. “We want Americans to begin the new year with a new tax system,” House Speaker Paul D. Ryan,
R-Wis., said on one of Congress's first days back this month. “It is high time.”
But as many political benefits as it brings, tax reform also carries with it big political risks. Let's run down what's at stake for Republicans as they try to do what no Congress has done in more than 30 years — substantially change the way you file your taxes.
They need a win
Republicans are nearly eight months into controlling all of Washington, and they don't have a major legislative accomplishment to champion, other than putting a conservative justice on the Supreme Court.
They do have a high-profile legislative failure, though. Obamacare is still the law of the land after Republicans spent seven years campaigning on getting rid of it and, this summer, fell one vote short of a deal to roll it back.
Passing tax reform could ease that sting a lot. If there's only one thing you could campaign on as a politician, putting more money in people's pockets is probably it. Research by conservative groups suggests independent voters in some key states are eager to hear more about simplifying the tax code and how it could grow the economy.
That's why many urged the party to regroup quickly after it fell flat on its face on Obamacare. Tim Phillips, president of the conservative Koch network group Americans for Prosperity, reeaally wanted Obamacare gone. But when Republicans failed, he immediately switched gears: “It's time to pivot to tax reform,” he said. “There's no time to pout.”
Republicans will be forced to work together again
One reason Republicans have yet to make good on a major campaign promise is because they have yet to build a trusting, working relationship with each other. The Republican Party is fractured nearly half a dozen ways — between conservatives and moderates, between moderates and Trump, between conservatives and Trump, between Trump's top aides and himself.
But, no rest for the weary. Republicans may need to pass a bill that doesn't require any Democratic votes through a budget process called reconciliation that lets them duck a Democratic filibuster in the Senate.
Which means they will have to figure out a way over and through all those divisions if they want to get tax reform done. So consider this a silver lining benefit for tackling this: If Republicans can find a way to do this, they can do just about anything.
Trump can look like a dealmaker
Other than avoiding a government shutdown and debt ceiling catastrophe this September, Trump has yet to strike a deal with Congress that leads to a tangible legislative victory. That's not good, since history suggests that presidents who don't have a working relationship with Congress by their first six months or so struggle to get much else done.
And it's really not a good image for Trump, who campaigned on literally writing “The Art of the Deal.”
And one very big way tax reform could backfire on Republicans
Tax reform equals generally good politics. But not all tax reform bills are created equal. Republicans agree they want to cut the corporate tax rate and individual income tax rate. But they can't agree on how to pay for it. And it seems like there are no easy answers to that one.
“It is always difficult, because it means what do you cut?” said Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, recently.
“Everything on the books has a constituency, and that's one of the problems.”
One idea, reported Tuesday by The Post's Damian Paletta, Sean Sullivan and Kelsey Snell, is to cut the mortgage interest deduction or deductions for state and local income taxes people pay.
That would save the government money, but at the expense of hugely popular deductions. So, instead of voters getting, say, a tax rebate in the mail signed by the president (a savvy George W. Bush move), people could file their taxes and plan to get less back on some of their more reliable deductions.
Democrats are ready and waiting for that moment. They've launched a campaign called “Not One Penny” aimed at pressuring Republicans to not to give wealthy people and corporations tax breaks.
In today's economic populist environment — in which voters are especially jaded by Washington and its intentions toward them — the message that Republicans cut taxes for the rich at your expense could resonate.