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Carolyn Kaster / AP

Steve Bannon is causing a stir inside the administration by pushing an idea that's anathema to most Republicans: raising taxes on the wealthiest Americans to pay for steep middle and working-class tax cuts. (Some officials who've heard Bannon's idea think it's crazy, but the President's chief strategist believes it's a potent populist idea.)

  • Bannon has told colleagues he wants the top income tax bracket to "have a 4 in front of it." (The top bracket is currently 39.6% for Americans who earn more than $418,400.)
  • It's classic Bannon – pushing a maximalist position that's reviled by the Republican establishment.

While all the public attention has been going to health care, Trump aides are teeing up an extremely aggressive tax plan.

Lobbyists who have met with Gary Cohn and Treasury Secretary Steven Mnuchin say they've been struck by how impatient the two appear:

  • Cohn has told associates that if tax reform doesn't get done this year, it's probably never going to happen.
  • Sources who know Cohn speculate that he'll leave the White House the instant he concludes tax reform is dead.

While Cohn and Mnuchin differ stylistically — Cohn is brash and physically imposing while Mnuchin is mild-mannered — sources who've been meeting with them say they share the same philosophy: Go big or go home.

What that means:

  • Cohn and Mnuchin aren't bluffing when they say they want to slash the corporate tax rate to 15% from the current 35%. Neither man has any interest in timid tax cuts, and they wager that special interests will relinquish their loopholes if they become convinced their tax rate really will be in the teens.
  • They're becoming far less wedded to revenue neutrality — the idea, favored by House and Senate Republican leadership, that tax cuts mustn't add to the deficit.
  • They're increasingly tantalized by an idea some conservatives (like Grover Norquist and Sen. Pat Toomey) are pushing: Allow major tax cuts to last longer than 10 years without having to balance the budget. (More detail here.)
  • Conservatives like Toomey favor a more expansive 20- or 25-year period. But top White House officials are more cautious, and are said to be weighing a 15-year period.

Context: The last time Congress passed major tax reform, in 1986, it was a two-year rollercoaster. This time, the White House officials driving the process have concluded there's no chance of getting Democrats to support what Trump wants to do. So they believe it must be done before the 2018 midterm elections or not at all.

  • That's going to be a heck of a challenge. They need to first pass a budget, which is embroiled in fights over defense spending and welfare reform. And they need to finish with health care.
  • Some top Republicans have come to believe, contrary to conventional wisdom, that tax reform stands a better chance if health care fails — so desperate will Trump and Republican leaders be for a victory.

Go deeper

Dave Lawler, author of World
7 mins ago - World

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Chinese President Xi Jinping. Photo: Wang Zhao - Pool/Getty Images

Chinese President Xi Jinping warned that a "new cold war" could turn hot, and must be avoided, in a speech on Monday to at World Economic Forum’s virtual “Davos Agenda” conference.

Why it matters: Xi didn't refer directly to U.S.-China tensions, but the subtext was clear. These were his first remarks to an international audience since the inauguration of President Biden, whose administration has already concurred with Donald Trump's determination that China is committing "genocide" against Uyghur Muslims, and issued a warning about China's aggression toward Taiwan.

Updated 39 mins ago - Politics & Policy

Dominion files $1.3 billion defamation lawsuit against Rudy Giuliani

Photo: Rey Del Rio/Getty Images

Dominion Voting Systems filed a defamation lawsuit against Rudy Giuliani on Monday seeking $1.3 billion in damages for his "demonstrably false” allegations about the company's voting machines.

Why it matters: Giuliani led former President Trump's efforts to overturn the results of the election and spread the baseless conspiracy theory that Dominion's voting machines flipped votes from Trump to Joe Biden.

Mike Lindell moves the goalposts on a run for Minnesota governor

MyPillow CEO Mike Lindell waits outside the West Wing of the White House before entering on Jan. 15. Photo: Drew Angerer/Getty Images

The will-he-or-won't-he speculation surrounding a possible gubernatorial run by MyPillow CEO Mike Lindell is destined to continue at least a bit longer.

What he's saying: Lindell told Axios that his focus is currently on proving his (baseless) claims of election fraud. He won't make a decision until that fight is resolved.