Per usual, first there's Donald Trump's "reality"...
And then there's reality, courtesy of WSJ:
Republicans, who control both chambers, are scouring the tax code, searching for ways to offset the deep rate cuts they desire. But their proposals for border adjustment—which would tax imports—and for ending the business interest deduction and making major changes to individual tax breaks for health and retirement have all hit resistance within the party. The only big revenue-raising provision with anything close to Republican consensus is repealing the deduction for state and local taxes, and that idea faces objections from blue-state lawmakers in the party.
The GOP’s dreams have collided with interest-group lobbying and the tax system’s reality. Politicians all profess to hate the tax code, but they don’t agree on exactly what they hate. Voters gripe about complexity but are wary of losing cherished breaks that are woven into the economy.
Who could've known tax reform could be so difficult? The biggest problem: Republicans have no way to pay for all the tax breaks they want to bestow on businesses and high-income individuals. One of the only new ideas—Paul Ryan's border adjustment tax on imported goods—hasn't gone over well and Ryan's basically already lost the messaging war on it.
Big retailers such as Target Corp. and Wal-Mart Stores Inc. launched a lobbying campaign to portray border adjustment as an existential threat to their businesses and a price increase for consumers.
Senate Republicans, parts of the Trump administration and some House Republicans now say they agree, imperiling the idea and leaving the House GOP plan $1 trillion in the hole. Without an alternative there is no clear way to prevent companies from seeking out lower tax rates abroad.
They have no way to even come close to patching that $1 trillion hole, especially since they also want to cut the corporate tax rate from 35 percent, maybe down to 20-25 percent or, if Trump had his way, 15 percent.
I mean, really, at this rate, why even fund a government at all? Republicans may not even be able to raise the debt ceiling properly—once a routine proposition for congressional lawmakers.
Republican lawmakers may still manage to pass some short-term tax cuts, but the odds of them managing an actual tax overhaul that's permanent is slim to none. Trump apparently likes those odds.