Congress on tax details

White House yielding to Congress on tax details

By BEN WHITE

The White House does not plan to release its own version of a tax reform plan and will instead leave that to the congressional leadership and the major tax-writing committees, a senior administration official said Thursday.

The decision to hand off the specifics of tax reform comes after the administration promised earlier this summer to release a full tax plan when Congress returned from its August recess. It also follows President Donald Trump’s repeated promises to deliver the biggest tax cut in American history.

“Our plan is to have a full-blown release of the plan in the beginning of September, with being able to vote and getting this passed before the end of the year,” Treasury Secretary Steven Mnuchin told ABC’s “This Week” in July.

Instead, the so-called Big Six tax reform negotiators — a group that includes Mnuchin, National Economic Council Director Gary Cohn, House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, House Ways and Means Committee Chairman Kevin Brady and Senate Finance Committee Chairman Orrin Hatch — will essentially turn over what they have done to the committees and let them fill in the particulars.

The move to turn over most of the detail work to Congress follows some progress from the Big Six to identify possible ways to pay for a cut in the corporate rate — to between 22 percent and 25 percent — including by capping the mortgage interest deduction, eliminating the deduction for state and local taxes, reducing the interest that companies can deduct and possibly taxing contributions to 401(k) retirement plans.

Many of the proposals came after negotiators agreed to drop a politically unpopular border tax that could have created more than $1 trillion in revenue over 10 years to help offset the cost of rate reductions for individuals and corporations.

All the deductions now being discussed are fiercely guarded by lobbying groups and prized by many taxpayers, so following through will be politically difficult. By handing off to Republicans in Congress, the White House could avoid some of the political fallout from the proposed changes.

So far, the White House has publicly released only a short set of goals for tax reform without getting into detail on where to set individual and corporate rates and how to reduce the impact on the deficit. Trump initially said he wanted a corporate rate of 15 percent. But that is widely viewed as impossible to reach without a big impact on annual deficits.

There is still no agreement on whether or how any cuts could be made permanent under the set of rules Republicans plan to use to pass a tax plan through the Senate with a simple majority.

There have also been conflicting signals from the White House on what to expect on tax reform in the coming days. Press secretary Sarah Huckabee Sanders on Thursday hinted at a possible tax reform event.

“We’re going to look at a lot of different ways in which to talk about that and present that to the American people, working with Congress to make sure that that happens,” she said. “I think that you can expect some of that to take place in the very short order, probably next week and following through to the fall.”

But other White House officials cautioned against expecting any kind of formal tax-plan rollout next week. And any such move now appears likely to come from Republicans on Capitol Hill rather than the White House. Trump, however, is expected to focus on tax reform in the coming days and then make a strong sales pitch for whatever eventually emerges from Congress.