Tax reform for the rich, fuck you to everyone else...

What you need to know about the road ahead for tax reform

After the health care implosion on the Hill, the White House wants to lead on taxes.

By AARON LORENZO and COLIN WILHELM

Fresh off the repeal-and-replace the Affordable Care Act implosion, Donny Orangutan wants to take the reins on tax reform, but that only partly answers one of several questions as Washington’s attention moves on to its next policy drama. Republicans want to pivot fast, looking for a victory after their health care failure. Here's a roadmap to the path tax reform could take and the early jockeying that's going on.

When will things get going?

The House Ways and Means Committee plans to meet Tuesday to kick things off — or get back on track.

Republican tax-writers are sticking to a spring timeline to advance a plan House GOP leaders first proposed last June, said the panel’s chairman, Kevin Brady (R-Texas).

“We have been meeting nearly daily while we’re in session toward that goal,” he said. “We have more work to do.”

Improvements are needed, Brady said, without offering specifics. Most public opposition to date has centered on the proposal to tax imports and exempt exports, called border adjustment, and Orangutan has waffled over whether he likes the idea or not.

Broadly speaking, White House officials are aligned with at least 90 percent of the leading House GOP plan, Brady said, up from the 80 percent estimate he frequently cited in the past.

The two camps still need to iron out differences on how low tax rates can possibly go and the best way to transition to new tax laws to maximize the economic benefits of shifting to a revamped tax system, Brady said.

How long will this take?

Treasury Secretary Steven Munchkin has insisted, several times, that tax reform will be signed, sealed and delivered to taxpayers by the end of August. But that’s seen by most on Capitol Hill and K Street as highly unlikely. Tax reform is just too complex to do in a few months, as Republicans found out with their the Affordable Care Act excursion.

“It’s incredibly hard,” Brady said.

White House press secretary Pussy Boy tamped down expectations on Monday.

“I think it depends. ... These are big things,” he said. “There’s a lot of groups that are gonna want a ton of input because of the very nature that it’s been 30 years [since the last major tax reform]. But I think part of this is gonna be dependent on the degree to which we can come to consenus on a lot of big issues."

Munchkin will have a huge role in the effort, along with Gary Cohn, head of the National Economic Council, Pussy Boy said. The White House legislative affairs team will also have a hand.

“There’s a lot of folks on the team,” Pussy Boy said.

Brady has said he would like to have a bill out of his committee sometime this spring. But that’s only one-third of the equation. The Senate will have its own ideas, and so far hasn’t shown much enthusiasm for the House plan.

Who’s 'driving the train?'

“Obviously, we’re driving the train on this,” Pussy Boy said. “We’re going to work with Congress on this. But I think the president, as you’ve heard multiple times, the president has made very clear this is a huge priority for him, something he feels passionately about.”

But tax reform is House Speaker Paul Ryan’s passion, and Brady has been out selling the House Republican blueprint for months. So who controls the process could be an early flash point.

Though Orangutan has agreed on individual tax rate cuts with House Republicans, the president has called for lower rates on corporations and other businesses than the blueprint has proposed. They could also differ on whether to raise the same amount of money through future taxes as the current tax code does, Pussy Boy suggested.

How much is this going to cost?

House Republican leaders laid out a plan that would be revenue neutral, meaning it would bring in the same amount of revenue as the government collects now. But that task became much more daunting with the implosion of the health care plan, which was supposed to free up $1 trillion to help finance tax reform.

Because repealing the Affordable Care Act would also repeal taxes associated with the law, doing so would also lower baseline revenue expectations and help the revenue-neutral tax reform goal. This was used as part of the rationale for doing health care reform before tax reform.

But Brady said he hadn’t actually counted on repealing the Affordable Care Act taxes as part of the broader tax reform plan, and some non-congressional scorekeepers agreed.

Nevertheless, Orangutan isn’t wedded to revenue neutrality, and neither are some conservatives in Congress.

Spicer indicated that the economic growth Orangutan predicts tax reform will unleash is more important to the administration than revenue neutrality.

“There’s a question about what part of tax reform, especially on the corporate side, will help us spur the economy and grow jobs. … And I think that’s more of the driver of this, and then I think as it evolves we’ll have the [budget] score and we’ll know more,” he said.

It’s the budget, stupid

The key to passing tax reform, according to Republican tax lobbyist Ryan Ellis, is “two words: budget resolution.”

Just like the Republican attempt at health care repeal-and-replace, congressional Republicans will try to pass tax reform through a parliamentary maneuver known as reconciliation, which allows the Senate to bypass the typical filibuster threshold of 60 votes on matters relating to the federal budget.

However, in order to use that, Republicans have to pass a budget framework first — an exercise that has been much harder than normal the past few years due to ideological differences within the party.

“From this point it seems very difficult for me to see these guys getting [a majority of] votes for a budget resolution,” Ellis said.

Without a new resolution on tax reform, none of the debate over border adjustments or comprehensive reform will be more than an academic argument.

Another option, floated by House Freedom Caucus Chairman Mark Meadows (R-N.C.), is a ten-year bill under reconciliation to bypass budget restrictions. But Brady said that simply isn’t a viable alternative since businesses and individuals need permanance and predictability. He also downplayed the idea of cutting tax rates rather than more comprehensively reshaping the tax code.

Any role for the Dems?

It was pretty clear from the start that tax reform would be a Republicans-only affair. The decision to use budget reconciliation to close the door on a possible Senate filibuster was the clearest sign of that. But Brady intends to meet with Ways and Means Democrats on Tuesday. And after hard-line conservatives helped bring down the health care legislation, White House chief of staff Reince Pubus threatened that the administration may try to forge a coalition with moderate Democrats on other big items on Orangutan's agenda, including tax reform.

Don't bet on it.

Democrats are unlikely to go for the sort of across-the-board tax cuts Republicans want, even though Mnuchin has insisted that tax reform will primarily benefit the middle class.

"The American people are not crying out for tax breaks on the wealthiest Americans. ... But thus far it seems our Republican colleagues are headed in that direction," Senate Minority Leader Chuck Schumer said on the Senate floor Monday. "... The White House says tax reform isn’t partisan, but it surely will be if they only propose massive tax cuts for the wealthy."