A tax plan that helps the rich only...

Trump, GOP tax plan omits details on who pays

The trick is to provide enough detail to satisfy lawmakers whose votes they’ll need but not so much that they get eaten alive by lobbyists.

By BRIAN FALER

Donald Trump is heading to Indiana Wednesday to sell a tax-reform plan that glosses over one key question: Who loses?

The long-awaited proposal released this morning by the so-called Big Six is heavy on the GOP's tax cut desires and light when it comes to explaining whose taxes will have to go up to help control costs.

After months of meeting behind closed doors, the Trump administration and the Republican leadership in both chambers announced they want to slash the corporate rate to 20 percent from the current 35 percent, while reducing taxes on unincorporated businesses to 25 percent. They’re proposing nearly doubling the standard deduction, expanding a tax credit for having children and creating a special low rate on multinational companies’ overseas earnings.

The cost of all that would run in the trillions, and Republican leaders don’t plan to simply cut taxes and leave it at that. They want to at least partially defray the cost with offsetting tax increases. But their plans for doing that, for the most part, are still a secret.

It’s not that Republicans don’t necessarily know who they want to foot the bill for their plans. The game plan is to essentially launch a sneak attack on cherished tax breaks, in order to give opponents as little opportunity as possible to mount a counteroffensive.

“They’re going to withhold them as long as they can,” said one former Republican tax aide. “If you don’t give the details on how to pay for it, people can’t really lobby against it.”

Republicans have offered some indication where they intend to find savings, such as by eliminating a long-standing deduction for state and local taxes, and also by paring a break for business interest payments. But they've been vague on many of the specifics, and they'll need much more than that to fit within their budget.

Interest groups are anxiously awaiting details on who would have to pay.

“I’m just sitting here on pins and needles, like the rest of town,” said Jerry Howard, head of the National Association of Home Builders.

His group has already prepared advertisements both supporting and opposing the Republican proposal, depending on the ultimate plan that lawmakers will prepare to vote on.

“We’re prepared for any eventuality,” he said. “We’re going to be ready to fight for or against whatever is in the tax bill.”

Republican leaders are under pressure from rank-and-file colleagues, especially House conservatives, to begin filling in the blanks. Some conservatives say they won’t vote for a budget, needed to move any tax plan, without more information.

So the trick is to provide enough detail to satisfy lawmakers whose votes they’ll need — and enough specifics to make their plan appear credible — but not so much that they get eaten alive by lobbyists.

Republicans also don’t know how many offsets they'll need exactly, because they haven’t agreed on how much their plan will ultimately cost. They’ll need a lot more pay-fors if the House, whose plan is deficit neutral, gets its way than if they can borrow $1.5 trillion as the Senate is proposing.

What’s more, the Big Six has been divided over how deeply to go after the business interest deduction and other breaks, with senators pushing for smaller cuts. The House and Senate are likely to go separate ways on many of the pay-fors.

The Big Six includes House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Finance Committee Chairman Orrin Hatch, Ways and Means Chairman Kevin Brady, National Economic Council Director Gary Cohn and Treasury Secretary Steven Mnuchin.

Howard, of the home builders group, says he’s worried about a phalanx of provisions: the cap on deductible mortgage interest, the tax rate on small businesses, the interest deduction, a credit for investing in low-income housing and plans to expand the standard deduction, among others.

His group has hired economists who previously worked for Congress’ Joint Committee on Taxation and also the House Ways and Means Committee to crunch the numbers on what Republicans’ tax plan in its entirety would mean for them, in order to help them to decide whether to support or oppose it.

Brady says he won’t release the legislative text of his plan, spelling out how exactly it will work, until after Republicans have a budget in place. Some don’t expect Republicans to release those details until shortly before the tax committee formally takes up a plan — next month at the earliest. Republicans are pushing to get a bill to President Donald Trump’s desk by the end of the year.

Some liberal groups aren't waiting for details to slam the plan.

"The Trump tax plan is a massive payback to the political donor class, conferring untold riches on those who don’t need it – the superrich and giant corporations – while depriving the federal government of needed revenue and paving the way for draconian cuts in Social Security, Medicare, education and more," Robert Weissman, president of Public Citizen, said in a statement.