Joshua Roberts / Reuters
“We think in tax reform we can create incentives for Americans to save more and save sooner, which can help,” Brady said. “We are exploring a number of ideas in those areas.”
Again, it would be a challenge to find the revenue needed to pay for the tax cuts without touching the popular retirement program.
4. The rich get richer
Trump and other Republicans have repeatedly emphasized that the primary goal of their tax reform effort is to help the middle-class.
But a number provisions, such as eliminating the estate tax, would disproportionately
benefit the wealthy. While that may be fine with conservatives ideologically, it could be politically poisonous, especially for moderates.
“I am voting NO,” Rep. Frank LoBiondo, R-N.J., said of the budget on Twitter,
replying to a constituent who complained the tax plan favors the wealthy.
5. Money overseas
A core element of the tax plan is to cut corporate tax rates, with the aim of bringing down the top marginal rate from 39.6 percent to 20 percent.
Tax writers also want to a change that would encourage repatriation of corporate profits. But that could cost money, so lawmakers are exploring the idea of a foreign minimum tax, which would ensure the U.S. captures some revenue from American companies operating in low-tax countries.
Not surprisingly, the business community feels that undermines the whole point of corporate tax reform.
So far, Republicans have been able to largely avoid these thorny issues, none of which have simple solutions. But that’s about to change.
“There’s only (been) discussion about cutting rates…that’s the sugar part of the bill,” Sen. Bob Corker, R-Tenn., told reporters in the Capitol this week. “The spinach part is what’s coming up next.”