WHAT'S AT STAKE ON TAX RE­FORM? AND WHY THE PRES­I­DENT WANTS IT SO BADLY ...

Tulsa World - - Politics Extra - By Am­ber Phillips The Wash­ing­ton Post

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.

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