Politics

Cruz wants a GOP-authored tax plan, but Trump has other ideas

Senator Ted Cruz gives his opinions on import/export border taxes

Senator Ted Cruz, speaking at the Southwest Agriculture Issues Summit, talking about import/export border taxes.
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Senator Ted Cruz, speaking at the Southwest Agriculture Issues Summit, talking about import/export border taxes.

Sen. Ted Cruz Wednesday unveiled his own plan to overhaul the nation’s tax code with only GOP votes – while the White House courted Democrats and House Republicans prepared to write their own plan.

Cruz, R-Texas, an influential voice among hardcore conservatives, pitched his appeal largely to staunch supporters who have long fought to simply the tax code and create a single individual tax rate.

He made his case in a speech to tax experts and analysts at a forum a few blocks from the Capitol. But at the Capitol and White House, Republican leaders were in serious discussions over the shape of their own plan. Without Cruz.

His proposal was short on details. Though he said he supported a flat individual tax rate, he did not offer a specific rate. Nor did he discuss how much revenue the plan could generate.

Key to Cruz’s proposal, which he conceded Wednesday won’t garner support from Democrats, is a legislative maneuver that would have the Senate limit debate with 51 votes instead of the usual 60. That would allow Republicans to do it all on their own, as they control 52 of the chamber’s 100 seats.

“We are facing unprecedented Democratic filibusters on virtually any meaningful legislation. So as a practical matter, it’s highly unlikely we are going to see a significant number of Democrats supporting tax reform,” said Cruz. That assessment is different from White House thinking.

Pointing to the GOP-controlled Congress’ failure to repeal and replace Obamacare, White House legislative affairs director Marc Short said Tuesday that it was no longer safe to assume Republicans alone could deliver the votes for a tax overhaul.

“We don’t feel like we can assume we can get tax reform done strictly on a partisan basis, so it would be wise for us … to try and reach out and earn the support from Democrats as well,” he told a Christian Science Monitor breakfast.

Trump met with senators from both parties Tuesday night, not including Cruz, to talk tax reform at the White House. He did the same with a group of lawmakers from both parties Wednesday.

At the same time, House Republicans said they would produce an outline of a tax plan by the end of the month.

“I would love to have the Democrats supporting and working with us in a constructive way on tax reform, but we're going to do it no matter what,” Speaker Paul Ryan, R-Wis., told reporters.

Some House conservatives are still fuming about the deal the White House made with Senate Democratic leaders last week to link hurricane aid with a three-month extension of the debt ceiling and government funding. Ninety House Republicans opposed the agreement, which passed overwhelmingly with support from lawmakers in both parties.

Asked whether conservatives should be concerned about a tax deal, Trump said Wednesday that any negotiation would uphold conservative principles, or Democrats would be cut out.

“I think that if we can do things in a bipartisan manner, that will be great,” said Trump. “Now, it might not work out, in which case, we’ll try and do them without.”

Cruz, who framed much of his presidential campaign around the threat that Trump would cut deals with Democrats, has been meeting with House members about his tax plan.

His office declined to specify whether he was singling out conservatives, but said he was meeting with “everyone and anyone who is willing to sit down and talk tax reform.”

Cruz has his own ideas. He said that if Congress would not buy his flat individual tax rate he could envision going to three rates instead of the current seven.

He proposed a corporate tax rate of 15 to 20 percent, and an end to the estate tax and alternative minimum tax. Trump has suggested a 15 percent corporate rate. Ryan has suggested a 20 to 25 percent rate.

The top corporate rate, which combines federal, state and local taxes, was about 39 percent last year.

In a panel discussion after Cruz spoke, conservative tax policy experts agreed with his assessment on using Republican votes.

“It’s hard to imagine [Senate Democrats] voting for anything that looks anything like a tax reform, even broadly under the most loose definition,” said Gordon Gray, director of fiscal policy at the American Action Forum. He supported Cruz’s plan to move tax reform with 51 Senate votes.

On Capitol Hill, not all conservatives agreed with that assessment.

Rep. Mark Walker, R-N.C., who chairs the conservative House Republican Study Committee, said he wasn't among the House members Cruz had met with, and lauded the president’s outreach.

“That’s what good leaders do,” he said.

Contact: Andrea Drusch at adrusch@mcclatchydc.com

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