The Republican-controlled House Ways and Means Committee recently announced that they would release a detailed outline of the "tax reform" plan that Congressional Republicans intend to pass sometime before the end of the year.
I thought that sounded overly optimistic if not entirely implausible, but it looks like my suspicions were right.
The outline that will be released in the coming weeks is not going to be a unified plan that both chambers of Congress and the White House have agreed to.
Senate Finance Committee Chairman Orrin Hatch says Senate Republicans will be releasing their own competing plan that will not necessarily mirror the House proposal or anything the White House is asking for.
The gaps may be significant. Hatch and President Donald Trump appear to be of different minds on how much to cut the corporate tax rate. Trump has pushed for slashing the current 35 percent rate to 15 percent; Hatch said Friday, “I sincerely doubt we’ll be able to get to that level.” Regarding a benefit for companies to immediately write off all of their capital expenditures, which is popular in the House Ways and Means Committee, Hatch told reporters Thursday: “We will have to see.”
In a sign of the challenges ahead to reach the goal of enacting a tax overhaul by the end of the year, Hatch said, “It’s much harder than health care.”
If the White House, the Senate, and the House each have different ideas and intend to push their own plans, where does that leave them?
Well, I'd say it leaves them exactly where they were before with Obamacare.
Everything we know about the GOP's desires and goals tells us the White House, Senate, and House proposals will each be terrible in their own ways. The only question is which one will be the worst proposal.
Even if congressional Republicans don't try to cut the corporate tax rate to 15 percent as Trump desires, their numbers are going to be atrocious. No amount of magic asterisks will mask the cost of tax cuts that will reduce federal revenue by more than a trillion dollars. Senate Republicans have admitted that cutting the corporate tax rate costs $100 billion per point and Republicans in both chambers have talked about cutting the corporate rate to 20 or 25 percent.
Recent reports suggest the "tax reform" outline House Republicans release in the coming weeks won't include specific rates or numbers. That will probably prevent the Congressional Budget Office (CBO) from immediately taking a shit on their proposal.