But the true heart of the GOP policy agenda is tax reform. Cutting taxes is what Republicans do. And the House GOP has a detailed plan to sharply lower personal and business tax rates that has been analyzed and scored by outside budget groups. Post-election investor enthusiasm for Trumponomics has been partly based on the notion that the proposal was pretty much buttoned-down and would get passed relatively quickly by Congress and signed by Trump.
And now Trump may have just scuppered the plan by blasting a key feature. In an interview with The Wall Street Journal, Trump had nothing positive to say about the GOP’s “border adjustment” idea to tax imports and exempt exports. He called it “complicated’ and added, “Anytime I hear border adjustment, I don’t love it. Because usually it means we’re going to get adjusted into a bad deal. That’s what happens.”
If the border adjustment feature is scrapped, it leaves Republicans with a massive budgetary hole in their economic plan, since border adjustment was supposed to raise some $1.2 trillion over a decade. Remember, Republicans have been touting their tax cut plan as not increasing the debt. Moreover, these estimates already include the possibility of more tax revenue from faster growth. Scored on a “static” rather than “dynamic” basis, the GOP tax plan might lose more than $3 trillion over a decade. And Republicans still say they want to balance the federal budget…
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