the Republican plan would simplify the rates and close a lot of loopholes — the simplification framework — but it wouldn’t radically reshape the taxation of individuals.Business taxes, meanwhile, would be transformed. The Republican plan cuts corporate rates, allows the immediate expensing of investments and eliminates the taxation of income from sales in foreign countries while raising an import tax, which functions sort of like a VAT. “These changes would go a long way toward shifting the tax system to taxing consumption rather than income.. Moreover, the Republican plan bears some family resemblance to the X Tax, David Bradford’s version of a consumption tax that isn’t necessarily regressive... The Republicans are going into this process from a position of extreme weakness. The first temptation will be to do the easy stuff, which is cutting the taxes, while skipping the hard stuff — closing loopholes and finding substitute revenue sources... Tax reform probably won’t survive if the Republicans try to do it the way they tried to do health care — staying within the lines of Republican orthodoxy while veering over to the extreme right in the hopes of winning the Freedom Caucus. Tax reform will probably only pass with bipartisan buy-in, if there are enough potential yes votes that you can afford to lose some off on the extremes.
the Republican plan would simplify the rates and close a lot of loopholes — the simplification framework — but it wouldn’t radically reshape the taxation of individuals.