There are only two certainties in life: death, and Republicans cutting taxes.
That, after all, is what Ronald Reagan did, it's what George W. Bush did, and it's what Donald Trump has promised to do—which, with a Republican House and Senate, looks like as sure a bet as there is. What's less clear, though, is whether it will be a run-of-the-mill tax cut or a once-in-a-generation tax reform.
What's the difference? Well, tax cuts are just about lowering tax rates, while tax reform is usually about lowering tax rates even more and paying for it by getting rid of tax breaks. The problem, of course, is that some people wouldn't benefit as much from lower tax rates as they do now from the tax loopholes that would be closed—so they'll fight it. In other words, tax cuts are easy because everyone is a winner, but tax reform is hard because there are losers. Still, Speaker of the House Paul Ryan thinks it's worth it since tax reform would let them cut rates lower and for longer than they otherwise could.
That second part is the most important. Republicans, you see, are only allowed to pass a tax cut with a simple Senate majority—which is all they're going to have—as long as it doesn't add to the deficit after 10 years. That's why the Bush tax cuts came included with an expiration date. So, as New York's Jonathan Chait explains in detail, if Republicans don't want their new tax cuts to come with a similar self-destruct, they'll have to come up with a way to pay for them.
Or, more accurately, appear to do so according to our budget rules. Although when we're talking about a $3 trillion tax cut like the one Republicans have proposed, 99.6 percent of which would go to the top 1 percent of households, even the most aggressive gimmicks wouldn't "cover" all the costs. Only about 50 percent of them. Here's how. When Republicans say that their tax plan wouldn't lose any revenue, the question is compared to what. And the answer, at least the one they want, is a world without any Obamacare taxes. Think about it like this. If you got rid of Obamacare's $1.2 trillion worth of taxes before you did tax reform, that'd be $1.2 trillion less you'd need to come up with for your plan to be "revenue neutral." And voilà, your $3 trillion tax cut would only look like a $1.8 trillion tax cut. (Ain't Washington grand: one tax cut would make another look more affordable). Add in Republicans' favorite assumption that tax cuts would in part pay for themselves—and you're about halfway to home to paying for your tax cuts without actually paying for anything.
There's a hitch, though. Even after seven years, Republicans are still struggling to come up with the "replace" part of "repeal and replace." Their healthcare plans would probably only make the things people don't like about Obamacare—high deductibles and narrow networks—worse without covering as many people. So instead, to paraphrase the President, they've said that they have something vague and terrific that's also terrific and vague coming any minute now. Even Godot didn't make people wait this long. But the point is that, unlike a few months ago, Republicans aren't willing to rush ahead with repealing Obamacare and the taxes that pay for it unless they have a real replacement on tap. They'd rather tell everyone how great their imaginary plan is than have everyone tell them how much they hate their actual one.
Not that it matters as far as tax reform is concerned. That's because Republicans aren't any closer to coming to terms on the rest of their plan either. The centerpiece of that is supposed to be what's known as a border-adjustment tax. Put simply, it would start taxing imported goods but not exported ones as part of a greater overhaul of the corporate tax system to tax domestic consumption rather than global profits. Now, economic theory tell us that this should send the dollar up enough that importers wouldn't be any worse off than they are now. But CEOs aren't willing to gamble their stock prices (or their bonuses, for that matter) on economic theory, no matter how well-grounded it might be. So every company that depends on imported goods, which is to say every retailer from Walmart on down, is lobbying hard against this tax—a tax, mind you, that Republicans are counting on to raise a trillion dollars over 10 years. Indeed, there are already enough Republican senators against it that the border-adjustment tax might not even be dead-on-arrival. It might be so dead that it never arrives. It's border adjustment tax or bust.
So it might just be bust. That's what happens when you can't agree on your real or fake pay-fors. What Republicans can always agree on, though, is just slashing the top tax rate and calling it a day. That's a lot more realistic than the legislative Rube Goldberg machine Paul Ryan has set up actually working.
The Trump tax cuts, then, might end up being a slightly classier version of the Bush tax cuts: more regressive, more red ink, and just as temporary. Sad!