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The 3 Things to Watch for in Trump’s Tax Plan

December 23, 2016, 12:00 PM UTC
Donald Trump Holds Press Conference To Announce His Tax Plan
NEW YORK, NY - SEPTEMBER 28: Republican presidential candidate Donald Trump gives a speech outlining his vision for tax reform at his skyscraper on Fifth Avenue on September 28, 2015 in New York City. Under the plan there would be four tax categories, with people earning less than $25,000 per year paying 0% tax. (Photo by Andrew Burton/Getty Images)
Photograph by Andrew Burton—Getty Images

The U.S. tax code has grown into an ungainly mess in the thirty years since Washington last streamlined it. Now, as Donald Trump prepares to take office facing a friendly Congress, business interests of all stripes are gaining confidence that the overhaul they’ve spent years pushing will finally become a reality. But it won’t be easy. Despite Republican control at both ends of Pennsylvania Avenue, there are for now more questions than answers about the direction a tax code rewrite will take. Here, the known unknowns.

1. Do Democrats get to weigh in?

Republicans can freeze Democrats out of the process entirely by employing a budget rule known as “reconciliation,” which would allow a reform package to clear the Senate with a simple majority. But that gambit could also restrict the overhaul’s scope and permanence. On the other hand, the eight or so Democrats whom Republicans would need to pass a bill through regular order could drive a hard bargain for their cooperation, and Republican leaders are signaling they intended to end-run the minority.

2. How fast can it move?

History suggests presidents are at their most productive in their first half-year in office. If the White House isn’t able to forge a compromise by the time the calendar tips into the fall, House Republicans will turn their focus from tough policymaking to their own reelections, and momentum for an overhaul could fade.

3. What happens to multinationals’ overseas profits?

Trump has proposed taxing the roughly $2.5 trillion that corporations have stashed overseas at 10%, potentially to help fund an infrastructure program. Congressional Republicans appear keener to dedicate those funds toward offsetting lower corporate tax rates overall. Both sides are eager to move to a territorial system but propose different ways of getting there.

A version of this article appears in the January 1, 2017 issue of Fortune with the headline “What to Watch for in Trump’s Tax Plan.”