The battle to lower taxes is a must-win for the Trump administration.

We need lower taxes to make America great again.

With healthcare reform on ice, Trump moves on to taxes — but Republicans aren’t unified on a policy approach for that, either.

The success of Trump’s presidency rides on his ability to make it happen.

Politico reports:

With President Donald Trump’s effort to undo Obamacare derailed by opposition from Republican Senators, the White House has turned its attention to its next big shot at a big win: tax reform.

The long-held GOP goal of re-engineering the U.S. tax system has now become a political imperative for the Trump administration, which has yet to deliver any major legislative victories despite Republican control of the White House and both houses of Congress.

Donors and influential Republicans are particularly eager to see tax reform completed before the 2018 midterms — both for their own bottom lines and because it will be harder for Republicans to hold on to Congress without policy accomplishments, White House advisers and outside supporters fear.

“If Republicans fail to repeal or at least substantially roll back Obamacare, it raises the stakes dramatically to pass into law a big, bold tax-reform plan,” said Tim Phillips, who leads Americans for Prosperity, the political group backed by the Koch brothers.

“On the political side, the biggest problem that Republicans could face in 2018 is not a partisan battle. It’s a sense of incompetence and inability to govern that will be most painful,” said Josh Holmes, a longtime McConnell adviser and former Chief of Staff.

“Unless they can figure out how to reverse this quickly, you can see where this cascades into more issues past health care,” Holmes added.

So there are two reasons why they need to pass tax reform:

  • To ensure GOP donors continue to give;
  • To prove to the voters that the GOP isn’t incompetent.

But it won’t be easy to get this done because of liberal Republicans.

But consensus on the political value of achieving tax reform ahead of the 2018 midterm elections does not equal agreement on the policy details — and that could bedevil Trump’s next big policy push, just as the healthcare effort was undermined by insurmountable differences between moderates and conservatives in the Republican Caucus.

At issue still is how low Trump can cut tax rates as well the best way to pay for those cuts, according to interviews with 10 people including senior administration officials, Republican congressional aides, lobbyists and close advisers to the president.

“They might be coalescing around something, but when you have not decided how to pay for the tax cuts, you are still a long way from a plan,” said one Republican lobbyist.

In the past few days inside the White House, there has been an eager pivot toward pursuing tax reform, according to two White House officials — especially since the businessman-turned-president feels more conversant in tax do’s-and-don’ts than in the weeds of healthcare.

“The administration has been working with outside groups, CEOs and businesses and has met frequently with conservative activists, who also could kill a plan.”

“We know this is even more important now, and the president is engaged on it,” the White House aide added.

Key policy differences still dominate the various discussions. One major open question is how much Republicans can cut tax rates on both the individual and corporate side of the tax code.

The big question: will Trump’s negotiating skills work with Congress?

The president has publicly indicated that he wants to get the corporate rate as low as 15 percent — a feat that tax wonks, including those in the administration, believe is far-fetched.

“The president set out the 15 percent as an ambitious goal post,” said another senior administration official, acknowledging that the final number could wind up significantly higher.

The intent was to start negotiations from a very low rate and hope to wind up somewhere close to 20 percent.

Too high a tax rate, such as 25 percent, would be seen as a loss for the business community, said one Republican lobbyist.

Outside economic advisers, such as Steve Forbes, are pushing the president to pursue a package of simply cutting Americans’ and businesses’ tax rates without overhauling the tax code itself.

That idea, however, will not fly with the Republican policymakers on the Hill who want to avoid adding to the deficit, said one Republican congressional aide — as well as pursue a once-in-a-generation chance to clean up the federal tax code.

“The heck with the Congressional Budget Office, we’ve got to get something done,” Forbes told Politico. “Then, we could leave the heavy lifting for another day.”

It’s amazing how Republicans keep forgetting how the Reagan tax cuts sped up job growth, and led to a much lower budget deficit.

Drain the swamp, lower taxes and get Washington out of our way, and the deficit will take care of itself.

 

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