With the startling, positive outreach to the congressional Democratic leadership to forge an agreement on short-term funding of the government to avert a shutdown, increasing the debt ceiling and funding Hurricane Harvey relief, followed by further efforts to enlist Democrats on immigration reform and tax reform, the door is now more open than seemed possible for President Trump to create a bipartisan coalition for tax reform and tax cuts, just as Republican icon Ronald Reagan did in 1986.
The essence of the Reagan plan, embraced by the Democratic leadership that controlled the Congress, was to create a fairer, simpler tax system, with lower rates and fewer tax breaks for the wealthy and corporations, that did not inflate the budget deficit.
It exempted millions of low-income families from a federal income tax by expanding the standard deduction, personal exemption and earned income tax credit; it drastically reduced the number of tax brackets, with the top rate for individuals cut from 50 percent to 28 percent; and it slashed corporate tax rates from 48 percent to 34 percent, paid for by eliminating or reducing corporate tax breaks.
There are substantial hurdles to forge a bipartisan consensus: Democrats are insisting that most of the individual tax cuts be focused on the middle class, and that deep tax reductions be paid for by loophole closings; Republicans are intent on deep corporate and upper income individual tax cuts, with little reforms to pay for them.
The tax debate is also a test for the Democratic leadership to rise to the occasion, as they did in reaching agreement with Ronald Reagan three decades ago.