Trump Said to Meet With Cohn on Thursday to Discuss Tax Overhaul

(Bloomberg) -- President Donald Trump will be briefed Thursday on various ways to implement comprehensive tax code changes, as the White House shifts focus after the failed attempt to replace Obamacare.

Trump will be presented with possible options by a group of administration officials including Gary Cohn, head of the National Economic Council, according to three people familiar with the meeting who asked not to be identified because the details are private. One of the proposals that will be presented is the border-adjusted tax, a centerpiece of the plan favored by House Speaker Paul Ryan. That provision would replace the 35 percent corporate income tax with a 20 percent levy on companies’ domestic sales and imported goods. Exports would be exempted.

The president is also expected to be briefed on details of a 2014 tax plan championed by former Representative Dave Camp, a Michigan Republican. Camp,  who chaired the House Ways and Means Committee, had proposed lowering the corporate tax rate to 25 percent while eliminating certain tax credits and deductions. The plan was deficit neutral, meaning the cuts didn’t add to the deficit. Revenue neutrality is essential for a tax plan to be permanent and passed without Democratic support in the Senate.

Other options will also be under discussion, the people said. The presentation is the latest in an ongoing series of White House meetings to help the administration craft a tax plan and fulfill what Trump has described as a top legislative priority.

White House Press Secretary Sean Spicer said Monday that the administration would be “driving the train on tax reform.” Spicer said Trump’s tax plan would be focused on job creation and economic growth, rather than just making sure it’s revenue neutral.

August Target

Republican lawmakers will be watching closely to see how Trump approaches tax legislation after he took a back seat to House Republicans during the drafting of the failed Obamacare measure. So far, the president and top administration officials have said they’re focused on reducing corporate income taxes to spur job growth and on reducing rates for individual filers, especially the middle class. It’s unclear where Trump stands on the border-adjusted tax -- his administration is divided, with Cohn said to be one of the officials opposing it.

It’s expected that the president will unveil a basic blueprint of what he’d like to see in a tax overhaul package -- although the timing remains unclear. Trump said on Feb. 9 he would be delivering a tax plan within two to three weeks. But in recent days, administration officials have indicated the process is likely to take longer.

Treasury Secretary Steven Mnuchin, who has a team within his department to evaluate tax-code rewrite options, signaled last week that while August is the administration’s target date, the fall may be more likely. Spicer on Monday cautioned that outside groups would want “a ton of input” into the package and “part of this is going to be dependent on the degree to which we can come to consensus on a lot of big issues.”

That input will include competing views on the controversial border-adjusted tax. The proposal has split corporate America into two camps -- retailers, automakers and oil refiners that rely on imported goods and materials oppose it, and export-heavy manufacturers support it.

The tax effort has also been complicated by the failure of the bill to repeal Obamacare. That legislation would have repealed about $1 trillion in taxes -- and paid for the tax cuts with spending cuts. Without that reduction, deep tax cuts will be harder for Republicans to implement without increasing the deficit.

“This does make tax reform more difficult,” Ryan said Friday after pulling the health-care vote. “But it does not in any way make it impossible.”

--With assistance from Sahil Kapur

To contact the reporters on this story: Justin Sink in Washington at jsink1@bloomberg.net, Matt Townsend in New York at mtownsend9@bloomberg.net.

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Alexis Leondis, John Voskuhl