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Some Tax-Cut Backers Urge Trump To Drop Full Overhaul, Go For Quick Win

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Some Tax-Cut Backers Urge Trump To Drop Full Overhaul, Go For Quick Win

Some Tax-Cut Backers Urge Trump To Drop Full Overhaul, Go For Quick Win

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  • <iframe src="https://www.npr.org/player/embed/524797139/524833764" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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STEVE INSKEEP, HOST:

If you filed for an extension on your taxes, you have something in common with the Trump administration and with Congress. They've put off voting on a promised tax overhaul until after they try again to replace the Affordable Care Act. NPR's John Ydstie reports.

JOHN YDSTIE, BYLINE: Steve Moore, who was an economic adviser to the Trump campaign, is worried.

STEPHEN MOORE: You know, you get a period when you're first elected where you've got to rush and get things done before that window slams shut.

YDSTIE: But here we are in mid-April, Moore says. President Trump has no legislative victories. And his treasury secretary says a tax cut will have to wait until the fall. Moore says Trump needs a win - now.

MOORE: Get a tax cut done right now. Do something that's achievable. You ran on a corporate and business tax cut, get that done. This is taking too long. And it's getting harder to do as each week goes by.

YDSTIE: Moore does have some skin in this game. He's co-author of the tax overhaul plan Donald Trump ran on during the election. But nearly a hundred days into his administration, Trump hasn't sent Congress that or any other tax plan. Moore says the lack of a tax bill is already having negative effects.

MOORE: When I talk to investors in business and I say what's going on, why is the growth rate slowing, and why do we see less jobs, they say part of the explanation is we're getting nervous about whether this tax cut is going to happen at all.

YDSTIE: Jon Traub, a former Republican staff director at the tax writing Ways and Means Committee, who's now at the consulting firm Deloitte, says the outlines of a Trump tax bill are still unclear.

JON TRAUB: We're still waiting to figure out what President Trump is going to embrace.

YDSTIE: The biggest question is whether Trump will embrace the controversial border adjustment tax. It's a key element of a dramatic plan to overhaul the tax code supported by House Republican leaders. The proposed tax is attractive because it raises a huge amount of revenue by putting a 20 percent tax on all imports.

Meanwhile, it eliminates taxes on American exports. That's divided the U.S. business community. Not surprisingly, retailers like Wal-Mart who import products they sell hate it while companies like Boeing who export love it. Again, Jon Traub.

TRAUB: The president has given mixed signals on that issue. And I think it's fair to say without his active support, that proposal probably cannot pass the House or Senate.

YDSTIE: If Trump doesn't support the border adjustment tax, he would need to find some other way to raise the hundreds of billions of dollars in revenue needed to cut tax rates without adding to federal deficits. The White House has floated several ideas for getting that revenue, including a carbon tax, says Traub.

TRAUB: It shows how desperate they are to find a large source of revenue other than the border adjustable tax as a way to finance lower corporate tax rates.

YDSTIE: But Steve Moore says it's time to stop worrying about whether tax cuts will add to federal deficits. And Moore says for now, Trump should forget about doing a big complicated tax overhaul.

MOORE: One of the lessons hopefully Republicans learned from the health care debate is keep it simple, stupid. The fewer movable parts, the easier it is to get it through Congress.

YDSTIE: And what would that look like? Well, cutting the corporate tax rate from 35 to 15 percent, an even lower tax rate on money U.S. companies bring back from overseas and requiring that some of that repatriated money be used to improve U.S. infrastructure. Moore and other prominent Republicans pushing this idea say even some Democrats might support that. John Ydstie, NPR News, Washington.

(SOUNDBITE OF MARCUS STRICKLAND'S TWI-LIFE'S "CELESTELUDE")

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