President Donald Trump has scrapped the tax plan he campaigned on and is going back to the drawing board in a search for Republican consensus behind legislation to overhaul the US tax system.
The administration's first attempt to write legislation is in its early stages and the White House has kept much of it under wraps. But it has already sprouted the consideration of a series of unorthodox proposals including a drastic cut to the payroll tax, aimed at appealing to Democrats.
Some view the search for new options as a result of Trump's refusal to set clear parameters for his plan and his exceedingly challenging endgame: reducing tax rates enough to spur faster growth without blowing up the budget deficit.
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Administration officials say it's now unlikely that a tax overhaul will meet the August deadline set by Treasury Secretary Steve Mnuchin.
But the ambitious pace to figure out a plan reflects Trump's haste to move quickly past a bruising failure to broker a compromise within his own party on how to replace the health insurance law enacted under President Barack Obama.
The White House is trying to learn the lessons from health care. Rather than accepting a bill written by the lawmakers, White House officials are taking a more active role.
Administration officials have signaled that they want to pass tax legislation with only Republican votes, yet they've also held listening sessions with House Democrats.
White House aides say the goal is to cut tax rates sharply enough to improve the economic picture in depressed rural and industrial pockets of the country where many Trump voters live. But the administration so far has swatted down alternative ways for raising revenues, such as a carbon tax, to offset lower rates.
Trump, who brands himself as a deal-maker, has not said which trade-offs he might accept and he has remained noncommittal on the leading blueprint, from Rep. Kevin Brady, chairman of the Ways and Means Committee.
Brady, R-Texas, has proposed a border adjustment system, which would eliminate corporate deductions on imports, to raise USD 1 trillion over 10 years that could fund lower corporate tax rates.
But that possibility has rankled retailers who say it would lead to higher prices and threaten millions of jobs, while some lawmakers have worried that the system would violate World Trade Organization rules.
Brady has said he intends to amend the blueprint but has not spelled out how he would do so.
Other options are being shopped on Capitol Hill.
One circulating this past week would change the House Republican plan to eliminate much of the payroll tax and cut corporate tax rates. This would require a new dedicated funding source for Social Security.
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