Over the past few weeks, as Russia-related revelations dominated the discussion in Washington, it has been easy to forget about actual governing. But things are happening. For instance, Republicans have been waiting in the wings for years, eager to pass tax reform legislation. When President Donald Trump–who has been busy swatting away rumors regarding his ties to Russia and jetting to Riyadh–took the White House, and Republicans maintained control of the House and Senate, Republicans could finally take a crack at a tax overhaul. Let’s take a look at their progress so far:

For one, it appears the border tax, favored by House Speaker Paul Ryan (R-WI), is all but moot. In a House Ways and Means committee hearing on Tuesday, a number of Republican members voiced their concerns about the tax, which would levy a 20 percent tariff on imports, while getting rid of export taxes.

Rep. Mike Kelly (R-PA) said he does not want funding for tax cuts, which would ultimately come from the consumer, “to be on the backs of everyday hardworking American taxpayers.” To another Republican member of the committee, which would have to approve any tax bill before hitting the House floor for a vote, supporting the border tax is out of the question. “I cannot support the border adjustability provisions as introduced last year in the blueprint,” Rep. Erik Paulsen (R-MN) said at the hearing, which included testimony from Target CEO Brian Cornell.

The Trump Administration also appears to oppose the border adjustment tax. “One of the problems with the border adjustment tax is that it doesn’t create a level playing field,” Treasury Secretary Steve Mnuchin recently said. “It has the potential to pass on significant costs to the consumer.”

At the end of April, Trump unleashed a one-page tax reform plan. The plan’s key features included severe tax cuts and a steep reduction in the corporate tax rate, from 35 to 15 percent. The 2018 budget the administration released on Tuesday did not include any substantial changes to the April plan.

According to a recent report by the non-partisan Center on Budget and Policy Priorities, the administration’s tax plan “contains specific, costly tax cuts for the wealthy and profitable corporations but only vague promises for working families.” Using IRS data, the report estimates the plan would provide the top one percent with an average annual tax cut of $250,000 per household.

In addition to the administration’s plan, and the House proposal backed by Ryan and Kevin Brady, the Ways and Means committee chairman, the Senate is reportedly developing its own tax blueprint.

Alec Siegel

Alec Siegel is a staff writer at Law Street Media. When he’s not working at Law Street he’s either cooking a mediocre tofu dish or enjoying a run in the woods. His passions include: gooey chocolate chips, black coffee, mountains, the Animal Kingdom in general, and John Lennon. Baklava is his achilles heel. Contact Alec at ASiegel@LawStreetMedia.com.

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Despite protests in the street and pleas from Capital Hill, President Donald Trump has yet to reveal the amount he has–or has not–paid in taxes. But he plans to overhaul the U.S. tax code, and on Wednesday, he announced a one-page tax plan to accomplish that. Here is what you need to know.

What’s New?

In short: a range of tax cuts and some efforts to simplify the filing process. Trump’s tax plan, which will likely receive heavy edits as it makes its way through Congress, would reduce the number of individual tax brackets from seven to three–10 percent, 25 percent, and 35 percent. The proposal does not yet specify the income thresholds for each bracket. Currently, people in the top income bracket are taxed at a rate of almost 40 percent and those in the lowest bracket pay 10 percent, which would remain the same under Trump’s plan. While Americans overall would likely receive some sort of a tax break, the wealthiest Americans would benefit the most.

In addition, Trump’s plan would lower the corporate tax rate–and make it apply to small mom-and-pops and giant multinationals alike–from 35 percent to 15 percent. That would put the U.S., which currently has the highest corporate rate of any industrialized nations, in line with Germany and Canada, and slightly below Britain.

Another major change included in the plan: killing the “death tax,” aka the inheritance or estate tax. As of 2014, the U.S. inheritance tax–up to 40 percent for some estates–was the fourth highest in the world. Trump’s plan would scrap that tax–which supporters say is a key tool for redistributing income, and critics say unfairly steal from the rich–entirely.

What About the Debt?

Under Trump’s proposed tax overhaul, the national debt would skyrocket. At a press conference unveiling the plan, Treasury Secretary Steven Mnuchin said the plan “will pay for itself with growth.” Since the revenue from taxes would drop, the government would need to find other ways to obtain money to pay for its various obligations. But a variety of nonpartisan budget think tanks and analysts projected that previous versions of Trump’s plan would cause the federal deficit to balloon.  

The Committee for a Responsible Federal Budget–a think tank that focuses on fiscal responsibility–predicts that the plan would add $3 to $7 trillion to the deficit over a decade. That would contradict Trump’s vociferous critiques of the rising debt under the past few administrations. History does not bode well for self-paying tax cuts–the idea that tax cuts would spur enough economic growth to balance out revenue lost due to lower rates. President Ronald Reagan’s tax cuts in 1981, for instance, contributed to the deficits that would follow.

What Do the Experts Think?

Bernard Baumohl, the chief global economist at the Economic Outlook Group: “The effort to introduce more fiscal stimulus into the economy is genuinely underway […] But the bare bones plan we saw unveiled [on Wednesday] is already conceptually flawed and unlikely to go far in Congress. The final product will bear no resemblance to the principal points highlighted in today’s meager release. Certainly, the first step in this process was unimpressive.”

JPMorgan Chase Analyst Jesse Edgerton: “Although the plan’s lack of detail makes estimating its revenue effects uncertain, we suspect the plan would be scored as dramatically increasing deficits, making likelihood of its passage through Congress slim […] the recent announcement is likely best viewed as an opening offer in a negotiation with many rounds to go.”

Economist Doug Holtz-Eakin, head of the Congressional Budget Office under former President George W. Bush: “Passing genuine tax reform would include structural changes. As long as those are not included, it is not reform. This bill as presented would add to the deficit. Growth alone cannot account for the loss of revenue from tax cuts. This means it cannot pass the reconciliation process and will not be able to become law.”

Alec Siegel

Alec Siegel is a staff writer at Law Street Media. When he’s not working at Law Street he’s either cooking a mediocre tofu dish or enjoying a run in the woods. His passions include: gooey chocolate chips, black coffee, mountains, the Animal Kingdom in general, and John Lennon. Baklava is his achilles heel. Contact Alec at ASiegel@LawStreetMedia.com.

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Protesters took to the streets of Glasgow last week to push back against the “rape clause” in the UK welfare system. After reforms of the welfare system took effect in April, the tax credits a family can receive for having children are now capped at two children–except in the case of mothers who have a third child as a result of rape. However, those mothers have to provide evidence that the child was in fact conceived from rape–a provision decried as inhumane.

Rape survivors have to fill out an eight-page form detailing the attack and a third party (such as a healthcare provider or a social worker) must provide additional testimony. The woman can only receive tax benefits if she is not living with the perpetrator and if she has not received financial compensation following a conviction of the perpetrator. But psychologists across the UK have expressed concern that this rape clause will harm survivors. In a letter to The Guardian, a set of psychologists write that forced reliving of the attack may cause “flashbacks, renewed shame and emotional turmoil, and consequently affect how mothers bond with their children.”

The clause was an amendment to an existing law, so it was not debated or voted on in parliament. First Minister of Scotland Nicola Sturgeon’s SNP has decried the clause and has fought against it. SNP MP Alison Thewliss led the Scrap the Rape Clause campaign, presenting a petition with 10,000 signatures asking for the clause to be struck from the tax reforms. Members of the Scottish Parliament have filed a motion to debate the clause, which could push the UK Parliament to also debate it. The SNP is not alone in its discontent: the rape clause may particularly harm women in Northern Ireland, where reporting serious crimes, including rape, is mandatory. If women apply for a tax credit for a third child conceived through rape, they may be drawn into a criminal investigation against their will.

Scottish Conservative leader Ruth Davidson has argued that the Scottish government could set up new benefits to aid families with more than two children, outside of the UK government’s reforms. Davidson accused Sturgeon of simply writing the rape clause off as part of her list of complaints against the UK government instead of actively considering how Scotland could adapt the tax credit system.

Whether or not the rape clause is upheld, families across the UK will find themselves in a new financial bracket thanks to the tax reforms. Historically there has not been a limit to how many children a parent can claim–so large families that have previously benefited from tax credits may now find themselves slipping out of financial stability. The tax reforms disproportionately affect low-income families and will push them deeper into poverty. The rape clause was established in an odd effort to be “compassionate” but the misguided attempt to soften the blow of the tax reforms has only exacerbated ideological divides both within Scotland and the UK as a whole.

Jillian Sequeira

Jillian Sequeira was a member of the College of William and Mary Class of 2016, with a double major in Government and Italian. When she’s not blogging, she’s photographing graffiti around the world and worshiping at the altar of Elon Musk and all things Tesla. Contact Jillian at Staff@LawStreetMedia.com

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