Under the illusionary sky of tax cut....

Trump to seize populist mantle for pitching messy tax overhaul

The administration is building its message around 'unrigging' the economy while lawmakers battle over corporate tax provisions and middle-class rates.

By BEN WHITE and TARA PALMERI

President Donald Trump will launch a major push for a sweeping tax overhaul with a speech Wednesday in Missouri aimed at convincing his base — and the rest of the nation — that he has a fresh vision for “unrigging” the American economy and isn’t just repackaging the trickle-down economics of past Republican presidents.

It could be a tough sell for the president as he fights with saturation coverage of Hurricane Harvey and as Democrats prepare to frame Trump’s approach as a giveaway to corporate fat cats and the nation’s richest taxpayers.

Wednesday’s speech in Springfield is being built around the sale of tax reform as a populist policy, according to five senior administration officials.

The tax speech is being drafted by senior White House aide Stephen Miller, a leader of the nationalist wing of the administration. In Trumpian style, he'll try out new phrases for selling the policy like "Jump-start America" and "Win again."

The speech is expected to frame the issue around wiping out some deductions that benefit mostly higher-income taxpayers, making the U.S. corporate system more globally competitive and simplifying the individual system. He is expected to discuss lower rates for middle-income taxpayers as an instant pay raise for everyday Americans, while arguing that lowering the corporate tax rate would make it easy for companies to expand — improving Americans' quality of life.

Trump, however, is not expected to go into much detail about deductions and loopholes on Wednesday as congressional Republicans and the White House continue to haggle over which ones to target. The administration is leaving much of the detailed work to Hill Republicans on the major tax-writing committees.

Republicans have polled the phrase “tax reform is about unrigging the economy,” and it’s done well with swing voters, people familiar with the data said. Treasury Secretary Steven Mnuchin has been using the phrase repeatedly.

“One of the keys to selling tax reform is the president making the point that tax reform will unrig this economy by stripping out the special-interest deductions and carve-outs that riddle this code,” said Tim Phillips, president of Americans for Prosperity, a group founded by the billionaire industrialist Koch brothers that is spending heavily to push changes to the tax code.

The Missouri speech will be the first in what is expected to be a heavy push by the White House to get the Republican Congress to pass a tax package including lower rates for corporations and individuals and send it to Trump’s desk to sign by the end of the year. Both the White House and congressional Republicans are desperate for a big legislative accomplishment before attention turns to the midterm elections next year, especially following the failure to repeal Obamacare.

Trump could eventually address the nation from the Oval Office on tax reform, but no such speech is yet planned, administration officials said. Republicans in Congress are also concerned that a big push from Trump, who has historically low approval ratings, could damage tax efforts rather than help.

"There's a risk, because when he said he would go out and talk about health care, he would go out and talk about fake news or anything else that's on his mind," said a senior GOP House aide. "There's a role for him to use presidential leadership and use the bully pulpit to get the base supportive of this debate."

The White House plans to sell tax reform in other states that are vulnerable in 2018. Officials want to keep the pressure on Democratic lawmakers to support the legislation, the aide said.

House Speaker Paul Ryan and House Ways and Means Chairman Kevin Brady have already started promoting tax reform. Brady gave a speech on tax reform at the Reagan Ranch last week. Ryan made the case for it at the headquarters of Intel, New Balance and Boeing.

But officials on the Hill worry that Trump will blame them for any failure to pass a tax overhaul, so they're throwing the onus back on him to travel around the country and create urgency.

"A lot of this is going to be him cooking stuff up in his head," the aide said. "He's a good marketer."

One White House official said the goal for the Springfield speech is to sell the “why” of tax reform. “It's about framing the argument and what the goals are and how what we're doing is going to affect the populist base.”

Three White House officials said Trump was not likely to get deep into specific elements of a tax reform package in the speech on Wednesday.

And the administration has made clear in recent days it will leave formal drafting of a tax bill to GOP leaders on the House Ways and Means and Senate Finance committees who have been part of the so-called Big Six negotiating group, which includes Mnuchin and National Economic Council Director Gary Cohn.

Among possible deductions that the White House could support eliminating are those for the use of electric cars, historic preservation and fashioning a ranch into a cattle-breeding facility.

Significant debate remains between the White House and Hill Republicans on elements of any final tax reform package, including which deductions to target, how low to push the corporate rate and how companies deduct business investments.

Some Senate Republicans and the White House want to continue the practice of businesses deducting the cost of investments along a steady schedule, which could allow for a bigger cut in the top corporate rate from its current 35 percent level, administration officials said.

House Republicans led by Ryan have pushed for full and immediate expensing as the best way to boost faster growth in jobs and wages. But doing that could mean only getting to 25 percent on the corporate rate.

Beyond the details, Trump on Wednesday plans to make the case that boosting growth from the sluggish 2 percent pace of the past several years and lighting a rocket under wages will require a fundamental rewrite of the corporate tax code to make the U.S. more competitive with other countries while giving incentives to businesses to bring money back from overseas and invest it in new plants, equipment and jobs.

Essentially, he will be trying to argue that slashing taxes for corporations is in line with the populist “Make America Great Again” message that drove his surprise election victory last year.

“This won’t be a speech about specifics but instead about the case that we have to get growth faster and wages faster and get people to focus on that and the impact on workers’ take-home pay,” a senior White House official said. “It’s about faster growth on the corporate side and making the individual side much simpler and easier.”

The White House thus far has released only broad outlines for tax reform legislation expected to be introduced in Congress in the fall. Trump said he wanted a top corporate tax rate of 15 percent. But people close to negotiations between the administration and GOP congressional leaders say the proposed rate will probably wind up being between 22 and 25 percent.

Another administration official said the Wednesday speech would be about Trump’s vision for the American economy. “He's going to cast a vision for the kind of America he wants to create. More opportunity for everyone. Making the American dream more accessible than it’s ever been before,” this person said.

“Every American worker will get a pay raise by getting to keep more of their paychecks. We're going to win again by slashing the business tax rate and making our companies competitive again,” this person added about what Trump plans to say. “They'll be able to hire more workers, boost wages and bring back trillions of dollars parked overseas. We're going to make taxes simple and easy so people don't have to spend a bunch of time and money on preparing their returns.”

Democrats, meanwhile, are gearing up to counter Trump’s attempts to sell his tax reform plans as a populist panacea.

“Donald Trump said he was going to be an economic game-changer for middle-class Americans, but every step of the way his administration has failed to live up to his promises,” said Andrew Bates, spokesman for the left-leaning group American Bridge. “This tax plan is just the latest example; it's shaping up to be a wasteful giveaway to the rich at the expense of everyone else, and no amount of White House spin will fool the public.”