This guide has a simple goal: to outline the landscape on tax reform without adding to the policy migraine many people have following last week’s intense debate over health care. So here are five key takeaways on where things stand.
- What’s the deadline? Republicans now say they want tax reform passed by Congress this calendar year — so, before Dec. 31, 2017.
- What’s the plan to make that deadline? According to White House legislative director Marc Short, Republicans have outlined an ambitious schedule. According to the GOP timeline, the House will write and mark up a bill in September; the House will pass tax reform, and the Senate will begin debating the legislation, in October; and the Senate will pass its bill in November.
- What’s in and what’s out? First, what’s out. The “border adjustment tax,” which would essentially tax imports and promote exports, is now dead. That creates a money problem for Republicans. The proposal, a cornerstone of Speaker Paul Ryan’s tax reform plan, could have brought in up to $1 trillion over a decade — revenue that Ryan and other Republicans had hoped to spend on tax cuts.
- How is this working exactly? Republicans have a different approach on taxes than they did on health care. Instead of closed-door meetings with separate, large groups of lawmakers in the House and Senate, the GOP has opted for closed-door meetings with one small group representing both chambers and the White House.
A total of six men — two from each chamber and the White House — have been meeting for months: Senate Majority Leader McConnell, R-Ky., and Senate Finance Chairman Orrin Hatch, R-Utah; Speaker Ryan and House Ways and Means Committee Chairman Kevin Brady, R-Texas; and Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn. The idea is for them to agree on key principles and then go to committees for specific details. House Ways and Means Chairman Kevin Brady, R-Texas, has invited members of the House and Senate tax writing committees to Ronald Reagan’s vacation home in California later this month for a speech and to take questions on the process.
- When should everyone start paying more attention? When Congress returns at the beginning of September, watch the House in particular for outlines and legislative language. What happens that month will determine the direction of any deal — and the possible winners and losers in the debate that follows.
What’s in? The core ideas remain to simplify the tax code (translation: fewer rules and fewer deductions) and to lower both individual and corporate rates. Ryan, R-Wisc., indicated in a June speech that individual and family rate cuts are his priority. Republicans also hope to add incentives for businesses to move jobs back from overseas.
Correction: This story has been corrected to reflect that the event at Reagan’s home is a gathering of Republicans for a speech and a question and answer session. We are told there are no other formal conversations or meetings planned.