The Art of the Tax Deal
Jim Carter is a member of AIM’s Board of Directors and recently served on President Donald Trump’s transition team. He wrote this article titled “The Art of the Tax Deal” that was originally published by Bloomberg BNA.
More than 30 years have passed since the U.S. last reformed its tax code. When asked at the time who deserved credit for the Tax Reform Act of 1986, Sen. Bob Packwood (R-Ore.), then-chairman of the Finance Committee, mumbled “God, I think.” But, ultimately, tax reform was made possible because policy makers struck a deal. Enter President Donald J. Trump. He may be a political novice but he wrote the book—literally—about making deals. Tax reform depends on his ability to convince at least 218 congressmen and 50 or more senators that it is in their interest to make a deal. That won’t be easy, but it is more likely than not to succeed this year. First, Trump campaigned on tax reform, calls it one of his top priorities and is prepared to put his considerable political influence behind it. Translating President Trump’s campaign promises into concrete tax reforms will require a deft willingness on the president’s part to give and take as circumstances warrant. “I … protect myself by being flexible,” he wrote in his 1987 book “The Art of the Deal,” “I never get too attached to one deal or one approach.” That flexibility will serve President Trump (and tax reform) well. Second, according to a recent Rasmussen Reports LLC survey, 73 percent of Americans want President Trump to succeed. While some in Congress will fight Trump’s efforts for purely political reasons, most won’t want to be viewed as opposing the new president. President Trump understands his window of opportunity is short and that he must act fast. As he wrote, “It pays to move quickly and decisively when the time is right.” Third, congressional Republicans have unified behind the president’s call for tax reform. They know they must deliver or face the wrath of an unforgiving electorate. Republicans command a comfortable 241-seat House majority. If they stick together, they can pass anything they want. But what passes the House may land without so much as a loud thud in the Senate.