Trump's plan for the 'biggest tax cut we've ever had' is already looking like it could be messy

Donald trumpGetty Images/PoolPresident Donald Trump

President Donald Trump told the Associated Press that he expects to roll out his plan for “maybe the biggest tax cut we’ve ever had” by Wednesday or “shortly thereafter” but the roll out of one of the most anticipated pieces of Trump’s agenda looks to have an unsettled path toward becoming law.

“We’re going to be putting that out on Wednesday or shortly thereafter,” Trump told the AP. “Let me leave a little room just in case. … And that’s a big story, because a lot of people think I’m going to put it out much later.”

Despite the timeline from Trump, statements from various administration officials have analysts questioning just how detailed the plan will be. And it remains unclear exactly what sorts of policies Trump’s plan will include.

Timing could further complicate matters: The White House is also trying to reboot a Republican plan to repeal and replace Obamacare, and a partial shutdown of the federal government is looming on Friday.

Surprising timeline

Trump’s announcement that the tax plan would be released Wednesday reportedly came as a surprise to people in the administration.

According to The New York Times, Treasury officials were taken aback. The Times reported that White House aides subsequently clarified Trump’s comments and said the plan released Wednesday would be a “broad” outline.

Additionally, Office of Management and Budget director Mick Mulvaney has said it is unlikely that the administration would release a full plan until June at the earliest.

Given these issues, analysts expect the rollout on Wednesday will not be a firm plan or legislative text, but rather a vague outline of what Trump wants to get done.

“If there is a release on Wednesday, we expect only a vague generalization of President Trump’s goals in the coming tax reform effort,” Issac Boltansky and Lukas Davaz of the political research firm Compass Point wrote in a note Monday.

Edward Mills of the investment bank FBR also predicted that the plan would be underwhelming.

“We expect the plan to provide broad outlines and principles but be short on specifics,” Mills wrote.

Muddled policy

Trump’s White House doesn’t yet have an answer on one of the most basic principles for a tax plan: whether or not the plan will add to the federal debt or be revenue-neutral. Mulvaney told Fox News’ Chris Wallace in an interview on “Fox News Sunday” that the Trump team hadn’t decided whether the plan would add to the debt or how long the tax cut would be in effect for.

“I don’t think we decided that part yet,” Mulvaney said. “Keep in mind, we have — it’s a balancing act in that, Chris. You can either have a small tax cut that’s permanent or a large tax cut that is short-term. I don’t think we decided that, but you’ll know more on Wednesday.”

At the same time, Treasury Secretary Steven Mnuchin said the plan would be a long-term overhaul of the tax code that would add to the debt in the short-term, according to The Washington Post.

The varying ideas that have been thrown around for the plan make it difficult to guess what it will look like.

At one point, reports indicated that the plan would include a carbon tax — an idea scorned by Republicans but favoured by Democrats. The White House denied those reports, but Politico reported that the idea led to fractures among White House advisers.

Other ideas the White House has reportedly considered include eliminating the state and local tax exemption for federal taxes, a value-added tax, and a border-adjustment tax.

Even the headline tax rate is in question. Trump long maintained during the campaign that he would cut corporate taxes to 15% from the current federal statutory rate of 35%.

Since then, however, Trump told a meeting with manufacturing CEOs that the rate would be somewhere around 15% to 20% and reports indicate that it could be as high as 28%.

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