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Defying the Odds

Defying the Odds
New book about the 2016 election.

Friday, August 25, 2017

Tax Reform: Nine Months Behind the 1985-86 Schedule

In Defying the Odds, we discuss tax issues in the 2016 election.

Politico Playbook comments on Gary Cohn's FT interview. Mnuchin once said tax reform would pass by August. Hill liaison then moved it to Thanksgiving. Now Cohn says it is the end of the year.
-- COHN SAYS TRUMP IS GOING TO LAUNCH A MAJOR PUSH TO PASS TAX REFORM. The FT reports Trump is heading to Missouri to begin selling his tax-reform proposal. “‘Starting next week, the president’s agenda and calendar is going to revolve around tax reform,’ Mr Cohn said in an interview. ‘He will start being on the road making major addresses justifying the reasoning for tax reform and why we need it in the U.S.’” OK, SURE. Trump was supposed to make August all about tax reform. Our colleague Colin Wilhelm pointed out yesterday that he hasn’t done squat to advance a tax code rewrite this month (http://politi.co/2xhVsel). Trump has spent the month agitating against the GOP leaders he needs to get this done. PLUS he has a government shutdown and debt-ceiling debate to engage in. We don’t doubt he’ll do a few speeches. But aides tell us all the time that they doubt his commitment to the issue because of his reluctance to get in the game months ago. ALSO: Can he last an entire speech without dumping on a Republican leader or key senator? Stay tuned.
THE REALITY: Cohn is part of the group negotiating a tax-code rewrite. He has impressed longtime aides and lawmakers, has dined with lawmakers in and around leadership and is fully engaged in the talks. But he spent his career at Goldman Sachs, not in government, which might help explain why he thinks this will be so easy.
-- A+ FOR AMBITION: Boy, this is an ambitious timeline. Cohn says tax reform shouldn’t be so hard because Congress has been holding hearings on it for years. Yes, but those hearings involve the 40 members on the Ways and Means Committee and the 26 members on the Senate Finance Committee. Eighty-eight percent of Congress has only thought about tax reform as an abstract exercise. The FT story http://on.ft.com/2w3B2aq
Compare and contrast with the 1985-86 tax reform.

On November 27, 1984, the Treasury Department issued a complete, detailed draft.

On May 9, 1985, the Senate Finance Committee held a hearing on tax reform proposals.

On May 28, 1985, President Reagan explained a revised ax plan (Treasury II) in a prime-time television address.  He sent it to the Hill the next day.

On May 30, 1985, the Ways and Means Committee began extensive hearings on the proposal.

As of late August 2017, there is no complete, public draft.