donald<u+00a0>trump <u+2019>s victory will embolden republicans to complete one of the party<u+2019>s core missions: slashing<u+00a0>tax<u+00a0>rates on individuals and businesses. despite the rifts between mr.<u+00a0>trump<u+00a0>and establishment republicans on trade and immigration, they largely agree on<u+00a0>tax<u+00a0>policy. and they are prepared to use full control of the house, senate and white house to enact sweeping<u+00a0>tax<u+00a0>cuts early in 2017. while the campaign consumed most of the public<u+2019>s attention, the house ways and means committee staff has been making progress in turning the party<u+2019>s conceptual blueprint into legislative text. <u+201c>because mr. trump has made it clear he wants to do tax reform in the first 100 days, house republicans are going to be ready,<u+201d> rep. kevin brady, chairman of the house ways and means committee, said in an interview wednesday. <u+201c>i<u+2019>m confident that this blueprint will grow the economy significantly, simplify the tax code for families and lower their tax burden and bust up the irs, redesign it so it<u+2019>s focused on customer service.<u+201d> the effort faces major hurdles, both political and practical, but the gop unity of purpose gives the tax rewrite effort the kind of momentum it hasn<u+2019>t had in years. <u+201c>it<u+2019>s going to be a top priority of the house, which will force the issue, regardless of where it is on everyone else<u+2019>s radar,<u+201d> said sage eastman, a former house gop aide who is now a principal at lobbying firm mehlman castagnetti. <u+201c>it will galvanize the town and could be the most significant and major piece of legislation to move early on in the administration.<u+201d> republicans in washington expect swift action on the most significant<u+00a0>proposed tax-code changes since 1986, which offer what they see as an accelerant to u.s. economic growth. they would lighten<u+00a0>tax<u+00a0>burdens on high-income individuals and multinational corporations and repeal the 100-year-old estate<u+00a0>tax. <u+201c> paul ryan is the kind of [house] speaker who stays up at night thinking about<u+00a0>tax<u+00a0>reform,<u+201d> said rohit kumar, a principal at pwc llp and a former aide to senate republican leader mitch mcconnell (r., ky.). <u+201c>and who knows how long these majorities are going to last?<u+201d> there may be little democrats can do, because republicans could employ a procedure that lets them pass the<u+00a0>tax<u+00a0>bill with simple majorities in the house and senate. there are obstacles. republicans will be operating with slim majorities, so they will have to satisfy every wing and nearly every member of the party<u+2014>a complex task with little room for error. a bill as large and complicated as a<u+00a0>tax-code overhaul can give party leaders opportunities to woo lawmakers with targeted provisions that benefit their states and districts. but those can also backfire by losing votes elsewhere. to avoid needing democratic votes, they can use the budget procedures known as reconciliation, which can lead to quirky outcomes such as the george w. bush tax<u+00a0>cuts being slated to expire less than a decade after enacted. the other option would be a compromise attracting enough democratic votes in the senate to reach the 60-vote threshold to cut off debate. that might require scaling back<u+00a0>tax<u+00a0>cuts or incorporating ideas of democrats in republican-leaning states who are on the ballot in 2018. the bipartisan approach is one suggested wednesday by sen. orrin hatch (r., utah), chairman of the senate finance committee. mr. hatch has been working on integrating corporate-level and shareholder taxes, which would create a different business-tax system than what house republicans have proposed. <u+201c>playing a pivotal role in these debates will be the senate finance committee,<u+201d> he said in a statement. <u+201c>with a history that runs deep in bipartisanship, we will renew our efforts to revamp the nation<u+2019>s tax code.<u+201d> republicans will also have to resolve the differences between mr.<u+00a0>trump<u+2019>s<u+00a0>tax<u+00a0>plan and the house blueprint, and incorporate senators<u+2019> input. they may smooth some kinks in their plans,<u+00a0>including mr.<u+00a0>trump<u+2019>s incomplete business-taxation proposal, the fact his plan raises taxes for some middle-income families, and the house<u+2019>s untested international<u+00a0>tax<u+00a0>idea. mr.<u+00a0>trump<u+00a0>called for reducing the top<u+00a0>tax<u+00a0>rate on individuals from 39.6% to 33% and for cutting the corporate<u+00a0>tax<u+00a0>rate from 35% to 15%. businesses that now report their profits on their owners<u+2019> individual returns would get the 15% rate and would likely pay a second layer if the owner takes money out of the business. he would also eliminate personal exemptions and the head-of-household filing status used by single parents, and his proposed breaks for child-care costs wouldn<u+2019>t be enough to prevent a net<u+00a0>tax<u+00a0>increase for millions of families. the trump campaign said it would ensure those people<u+2019>s taxes wouldn<u+2019>t rise. the house plan, by contrast, sets the corporate<u+00a0>tax<u+00a0>rate at 20% and the rate for other businesses at 25%. either plan needs rules to prevent individuals from making their wages and other ordinary income look like lower-taxed business income, a problem that mr.<u+00a0>trump<u+2019>s campaign acknowledged and said congress would solve. capital journal is wsj.com<u+2019>s home for election 2016 news. the house plan would also create a international-border-adjusted corporate<u+00a0>tax<u+00a0>that applies depending on the location of sales, not profits. that is complicated, and it may face objections from retailers and financial-services companies as well as a potential challenge from the world trade organization. both plans would significantly increase budget deficits and give the largest<u+00a0>tax<u+00a0>cuts to high-income households. mr.<u+00a0>trump<u+2019>s plan would reduce federal revenue by $6.2 trillion over a decade, according to the<u+00a0>tax<u+00a0>policy center, a project of the brookings institution and the urban institute. the top 1% of households would get a 13.5% boost in after-tax<u+00a0>income, compared with a 4.1% rise for the entire population. republicans say their plans would spur growth due to the<u+00a0>tax-rate cuts and the ability to write off capital expenses immediately instead of depreciating them over time. one unknown is the role mr.<u+00a0>trump, a legislative novice and self-proclaimed deal maker, would play. would he mediate between the house and senate? how hard would he insist on his own ideas? or would he let congress do the nitty-gritty work while he builds the public case and takes credit? if sidelined in the negotiations, democrats will be trying to focus on the distributional and deficit impacts of the gop plans to rally opposition. <u+201c>my sense of his<u+00a0>tax<u+00a0>plan is that he<u+2019>s willing to sign whatever supply-siders put in front of him,<u+201d> said harry stein, director of fiscal policy at the center for american progress action fund, a group aligned with democrats. <u+201c>public opinion has the potential to be an important check. whether the<u+00a0>trump<u+00a0>administration and mr. ryan give into public opinion where their ideas are unpopular or not remains to be seen.<u+201d> write to richard rubin at richard.rubin@wsj.com
donald trump<u+2019>s win gives gop fuel to slash taxes - wsj
richard rubin