The Memo: Trump tax plan gets smooth lift-off

The Memo: Trump tax plan gets smooth lift-off
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President TrumpDonald John TrumpAverage tax refunds down double-digits, IRS data shows White House warns Maduro as Venezuela orders partial closure of border with Colombia Trump administration directs 1,000 more troops to Mexican border MORE and Republicans got off to a solid start with their tax reform plan on Thursday, though they have plenty of hurdles still to clear.

The president and the GOP have an enormous amount riding on the success of the tax push, given the failure of their efforts to repeal and replace the Affordable Care Act, also known as ObamaCare, earlier this year.

Trump and Speaker Paul RyanPaul Davis RyanFive takeaways from McCabe’s allegations against Trump The Hill's 12:30 Report: Sanders set to shake up 2020 race McCabe: No one in 'Gang of Eight' objected to FBI probe into Trump MORE (R-Wis.) spearheaded the push on Thursday. Trump insisted that the tax-reform pledge would be “a big beautiful Christmas present” for the American people “in the form of a tremendous tax cut.”

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Ever the performer, the president went so far as to kiss a mock-up of the postcard-sized form that House Republicans say will be sufficient for most people to file their taxes. 

“I didn’t know I was going to be given a prop,” he said, flanked by a smiling Ryan and House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradySmaller tax refunds put GOP on defensive Key author of GOP tax law joins Ernst and Young Lawmakers beat lobbyists at charity hockey game MORE (R-Texas.).

Allies of the president make no secret of the fact that, behind the smiles, the White House’s patience with Capitol Hill leaders is thin after the earlier failures on health care. There is simply no room to come up short this time, they say. 

“If the Congress doesn’t pass a tax-reform bill, their chances of getting reelected will be greatly diminished,” said Barry Bennett, who worked as a senior adviser to Trump’s presidential campaign. “They’ve got to prove they can do something.” 

The Speaker and the president will be relieved that party dissent was muted, for the most part, on Thursday. 

The most prominent objections came from lawmakers in higher-tax states such as New York, whose constituents would be among the hardest hit by steep cuts to so-called SALT deductions — those taken for state and local taxes. 

At least two New York Republicans, Reps. Pete KingPeter (Pete) Thomas KingHouse to vote on background check bills next week The Hill's 12:30 Report: Sanders set to shake up 2020 race House Dems release 2020 GOP 'retirements to watch' for MORE and Lee Zeldin, seem likely to oppose the current plan on that basis.  

King told The Hill he was “strongly leaning no,” though he also said he was “still analyzing” the legislation. Zeldin was even clearer, saying that he was opposed to the plan “in its current form.”

So long as those critical voices do not multiply into a full-scale rebellion, however, they seem unlikely to endanger the overall plan in the House.

Trump told Brady during their White House meeting that he hoped to have a bill on his desk by Thanksgiving — a comment that provoked some puzzlement, since the more likely aim is to have legislation get through the House by that point.

However, Republicans express confidence that things will fall into place before the end of the year. 

“The prospects are very good,” said conservative strategist Greg Mueller. “It may be messy for a while, at first, but I think by the end of the year we will have a Christmas bonus for the American people. ” 

Were that to happen, he added, “there is going to be a very strong economic narrative that Republicans are going to be able to run on” in the 2018 midterm elections. 

Democrats, however, panned the Republican plan as a giveaway for the rich. House Minority Leader Nancy Pelosi (D-Calif.) likened the proposal to a “Ponzi scheme,” asserting that the cost of the tax cuts would be met by cutting spending on programs such as Medicare and Medicaid. 

“What’s really important to know about what they’re doing is — what they give you with one hand, they take away with the other,” Pelosi told reporters. 

The Republican proposal would cut the corporate tax rate to 20 percent from its current rate of 35 percent. The estate tax would also be eased and eventually erased: The plan roughly doubles the threshold for taxation to approximately $11 million for the moment, and the tax itself is eradicated after six years.

Democratic strategist Hank Sheinkopf, speaking earlier this week, said there was no way Democrats could cross the aisle to support such a plan. To do so, he said, they would have to “lose whatever they have left of the lower-income group” of voters. 

Trump and Ryan don’t need any Democratic votes in the House to get their plan across the finish line, however. And they are betting that measures with more obvious middle-class appeal can help boost the popularity of their proposal. 

Their legislation would virtually double the standard deduction and reduce the current seven income tax bands to four.  

The top rate of income tax would remain at 39.6 percent, but it only affects individuals who earn more than $1 million per year. For single filers, a 12 percent tax rate would kick in at $24,000; a 25 percent rate at $90,000 and a 35 percent rate at $260,000.

Ryan, for his part, repeated several times on Thursday the amount of money he said the proposed plan would save a typical family of four: $1,182.

Trump will depart Friday for a 12-day trip to Asia. That will leave the tax push primarily in the hands of lawmakers on Capitol Hill — a situation that is just fine with most them.

"I'm counting on all of you to help maintain a momentum on the tax cuts and tax reform during that time,” Trump said at Thursday’s meeting with Republican leaders in the Cabinet Room of the White House. “I have no doubt you'll be able to do it.”

If he is proven wrong, there will be political hell to pay.

The Memo is a reported column by Niall Stanage, primarily focused on Donald Trump’s presidency. Scott Wong and Niv Elis contributed.