Trump expected to include Democrat-friendly spending in tax plan


President Donald Trump’s tax blueprint will closely mirror his proposals on the campaign trail last year, leading some to dismiss the still-fluid plan as more of a public relations stunt than a stab at real policymaking. | AP Photo

But the president’s plan likely won’t include the House GOP’s controversial border-adjustment tax

Updated


When the Trump administration unveils its broad tax proposal on Wednesday, its marquee policy ideas are expected to include infrastructure spending and a childcare tax credit, developed by Ivanka Trump — moves the White House hopes will bring Democrats to the negotiating table on a tax overhaul, according to four sources familiar with the plan.

The proposal is not likely to include the border adjustment tax, the controversial idea espoused by Speaker Paul Ryan that has divided the business community. And it is expected to tout a corporate rate of 15 percent; Trump promised businesses as much during a campaign economic speech in Detroit in August.

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The plan is not expected to include details on ways to offset new spending, or deep tax cuts — though, internally, the White House remains divided as to how much it should address the deficit in tax reform.

Instead this broad-brushstroke plan is meant to show voters that the Trump administration is making progress on its policy agenda as it approaches the 100-day mark and that the White House, not Capitol Hill lawmakers, is driving any overhaul of the tax system. That’s important to the administration after it felt burned by the failure to repeal and replace Obamacare.

The border adjustability provision is crucial to the House Republican plan, and Trump’s opposition would force tax writers back to the drawing board because they were counting on it to generate revenue to fund other tax cuts.

Trump’s blueprint will closely mirror his proposals on the campaign trail last year, leading some to dismiss the still-fluid plan as more of a public relations stunt than a stab at real policymaking.

“We will be disappointed on Wednesday when we see that this is the big announcement,” said one lobbyist. “They should not be building this up for a big nothing burger.”

Ironically, Capitol Hill’s primary influence on Trump’s tax proposal comes from the duo of Democratic Minority Leader Chuck Schumer and Republican Sen. Rob Portman.

Back in the summer of 2015, the two came up with an international tax plan that took one-time corporate repatriation money and funneled it into the Highway Trust Fund to fix the nation’s crumbling infrastructure — an idea that has received the support in the past of Ryan and even former President Barack Obama. “It’s the only thing we’ve seen out there that has some bipartisan support,” Schumer said in July 2015.

Now, the Trump administration is trying to resurrect this idea as a way to tackle infrastructure spending and tax reform as part of one package and to woo Democrats by pitching an idea put forward by one of their most vocal leaders, Schumer.

Senior congressional Democrats, however, threw cold water on Trump’s tax framework on Tuesday.

“If they’re only talking about the corporate rate and not helping small business, I think that would for me be a nonstarter,” Michigan Sen. Debbie Stabenow, a member of Democratic leadership, told reporters. Of the planned tax cuts, she added, “I’ve seen no plan in the past that could get to that level without adding to the deficit.”

The Senate Finance Committee’s top Democrat, Oregon’s Ron Wyden, was just as dubious of Trump’s plan.

“You didn’t hear much of anything about working families,” Wyden said. “I’m certainly not going to support a tax proposal that gives crumbs to working families and cakes to the fortunate few.”

Even Republicans were skeptical of Trump’s tactic.

“I think doing infrastructure in a tax reform bill would be largely, I believe, designed to attract Democrats to get on board, and I just don’t know if there are going to be any Democrats that are gonna be available for support of a tax reform bill,” said Sen. John Thune, a Republican leader. “We’ll see.”

“And it’s probably going to end up being, in the end … a Republican-only exercise,” Thune added.

Until five days ago, the White House had no concrete tax proposal.

It had not settled on the size of the tax cuts, or whether a package should add to the deficit or keep it as-is — philosophical ideas that would guide the shape of any package.

Nor does it have in place key Treasury staffers like the assistant secretary of tax policy, who in past administrations, would advise on tax tweaks.

Then, the president made an appearance at the Treasury Department on Friday afternoon alongside Secretary Steven Mnuchin and in a move that surprised even those-in-the-know, he offered to unveil a tax plan on Wednesday.

That promise made White House and Treasury officials scramble to hastily reach consensus on the highlights of a tax plan before they meet on Tuesday with Republican leaders including Majority Leader Mitch McConnell, Speaker Ryan, Chairman of the Ways and Means Committee Kevin Brady and Senate Finance Chairman Orrin Hatch.

As of Monday evening, Hatch said that he had yet to see the administration’s proposal. As for the 15 percent corporate rate, Hatch expressed skepticism.

“He’s always wanted to do that. I’m not sure that he’s going to be able to get away with that because you won’t very well be able to balance the budget,” Hatch told POLITICO before answering a call on his cell from his former chief-of-staff turned White House staffer, Rob Porter.

Burgess Everett, Elana Schor and Brianna Gurciullo contributed to this report.

Read more : http://www.politico.com/story/2017/04/25/donald-trump-tax-plan-democrats-237575

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