Math problem bedevils GOP tax rewrite

WASHINGTON — There is a math problem at the root of the Republican delay in introducing a sprawling tax bill, and it grows, in part, from President Donald Trump’s two non-negotiables on taxes.

Trump has insisted on “massive” tax cuts, including reducing the top corporate tax rate to 20 percent from 35 percent and delivering a tax cut for the middle class. Both of those goals have proved difficult for the Republicans crafting the House version of the tax bill. They are running into political challenges as they try to offset lost revenue to stay within the confines of the $1.5 trillion tax cut that lawmakers have voted to allow.

The tax rewrite is pitting businesses against individuals, as lawmakers look for ways to offset trillions of dollars of personal and corporate income tax cuts by limiting popular individual tax breaks, including preferential treatment for 401(k) plans and the state and local tax deduction. Business groups, meanwhile, say lawmakers run the risk of put- ting the United States at a global disadvantage if it does not reduce the corporate tax rate to a level commensurate with other industrialized nations.

The bill, which had been scheduled for release Wednesday, is now expected to be unveiled Thursday, despite continuing struggles to reach agreement on how to pay for everything lawmakers want to include. Some industry groups familiar with the negotiations said the remaining shortfall was in the hundreds of billions of dollars.

On Wednesday, lawmakers were discussing a potential bandage solution to buy themselves time to figure out the hard math. That solution would call for phasing in some rate cuts over a period of years and making some cuts temporary, which would lessen the short- and long-term revenue hit.

Industry groups familiar with the discussions said such a move was not meant to be the actual legislative solution, but rather a placeholder that would allow Republican leaders to work out the details of a new set of revenue-raisers that would be inserted in the bill before the full House votes on it.