Since his campaign kicked off in 2015, President Donald Trump has remained consistent on a few policy positions. One of the most significant was his promise to deliver comprehensive tax reform, and it seems to be the issue to which he's now devoting the most attention.
On Wednesday, Trump laid out his principles for tax overhaul in a speech kicking off a campaign to pass a tax plan by the end of the year.
Despite the coming public tour, a massive amount of behind-the-scenes work must still be done to craft the actual plan.
According to multiple reports, Republicans have yet to craft a full-fledged piece of legislation, and public details from congressional leaders and the White House have been sketchy at best. Trump did not mention specifics in his speech in Missouri, instead opting for general principles that were a reheated version of other statements from the Trump White House.
Here's an overview of the biggest the questions Republicans still need to answer about their tax plan:
- Are the tax cuts permanent or temporary? Permanent tax cuts are more politically difficult, since any bill adding to the deficit for more than 10 years can't be done through budget reconciliation. That would leave it open to a filibuster from Democrats in the Senate. That's why President George W. Bush opted for temporary cuts in 2001. Republicans have signaled they want something like the 1986 cuts under Ronald Reagan — which were permanent. House Speaker Paul Ryan has long argued for permanent cuts, but winning over any Senate Democrats, much less the eight required to bypass a filibuster, would be a tall task.
- What will be the proposed corporate rate? During an interview with the Financial Times, Gary Cohn, Trump's top economic adviser, did not commit to Trump's promised 15% corporate rate. He said only that the White House wanted to get the rate "as low as possible." The rate could fall to the mid-20s, a more modest decrease from the current federal rate of 35%.
- What will be the proposed rate for the repatriation tax? The Trump administration has floated a one-time rate of about 10% to encourage US companies to bring cash back from overseas. That would be double the rate from the most recent repatriation, in 2004. Cohn, however, said during his FT interview that no specific rate had been discussed.
- Which deductions would be eliminated? Trump's team and most Republican leaders have mentioned only three deductions they plan to keep: on mortgage interest, charitable giving, and retirement contributions. Another question is what the plan would do with the deduction for carried interest, which lets managers of some private investment funds pay a lower rate. Overall, a reshaping of tax deductions could draw pushback from industries that benefit from a slew of exemptions — not to mention individuals who also benefit from tax breaks like the ability to deduct state and local taxes.
- What will the proposed income ranges be for new tax brackets? The Trump administration has consistently suggested reducing the number of individual income-tax brackets to three from seven. But it has not clarified which incomes those brackets would contain.
The Trump administration and leading Republicans lawmakers have pushed to pass a tax bill by the end of the year.