By Aaron Lorenzo | 10/11/2017 10:00 AM EDT

TRUMP-CORKER FALLOUT ON TAXES: There's not much dancing around the potential tax reform reverberations from President Donald Trump's simmering scrap with Sen. Bob Corker.
Except, of course, for Trump, who dismissed the possibility pretty quickly.

When the president was asked Tuesday whether he was concerned his dispute with Corker would affect tax reform, he told reporters: "I don't think so, no. I don't think so at all. I think we're well on our way."

But GOP senators on recess this week are already spending a lot of time talking about their retiring Tennessee colleague and Trump, who've clashed repeatedly in public in recent days. Among Twitter lowlights: Corker called the White House an "adult daycare center" and Trump labeled him "Liddle Bob Corker."

The Corker-Trump skirmish distracted Republican senators from their main mission of selling tax reform, with many of being asked whether they agree with Corker's comment to The New York Times that the majority of Senate Republicans share his views about Trump, our Burgess Everett reports.

Remember, before all of this boiled over, Corker was already warning that he'd oppose tax legislation that adds to the federal deficit.

Senate Majority Leader Mitch McConnell (R-Ky.) called Corker a "valuable member" of the party, noting his importance to passing tax reform. Both Corker and Trump need to stop, Sen. Joni Ernst (R-Iowa) told Burgess. "We've got so many other things that we need to be focusing on right now," Ernst said. "We need to look ahead, not reflect on anything that's been done or said in the past."

No letup at 1600: The White House didn't show any signs of backing down Tuesday, with Press Secretary Sarah Huckabee Sanders repeatedly criticizing Corker over the Iran nuclear deal at her regular media briefing, saying he "rolled out the red carpet" for it as chairman of the Senate Foreign Relations Committee.

Pressed on whether Trump's feuds with Corker and other senators, including McConnell, was jeopardizing tax reform, Sanders said the administration remains committed to working with Congress on the issue. But she quickly pivoted, putting the onus on Congress - in some harsh terms.

"I don't think he's alienating anyone," she said of Trump. "I think that Congress has alienated themselves by not actually getting the job done that the people of this country elected them to do. They all promised and campaigned on repealing and replacing Obamacare; they haven't done that. They've campaigned on tax reform; hopefully we see that happen. We're certainly committed to that and think we'll get there. But time and time again, Congress has made promises and failed to deliver."

She also said, "I think that we would all be a lot better off if the Senate would stop taking vacations and start staying here until we actually get some real things accomplished."

Asked directly about potentially losing Corker's vote on tax reform, Sanders said: "Hopefully, [if] Senator Corker, who's been somebody who's consistently talked about being a fiscal hawk, was presented with responsible cuts ... he would certainly support those."

Avoiding the noise: On the House side of the Capitol, Ways and Means Chairman Kevin Brady (R-Texas) tried to stay above the fray, saying not one GOP senator defends the status quo on taxes. "I fully expect each of those 52 Republican senators to weigh in in a positive way and deliver tax reform," Brady told reporters.

HEADING TO HARRISBURG: Trump is on his way to Harrisburg, Pa., later today to talk taxes to an audience mostly made of truckers, according to Sanders. Look for Trump to play up the benefits he believes will come from the tax plan he's pushing with Republican leaders in Congress.

Local Republican leaders say the address will be a town hall-type of event "in front of 500 to 1,000 people at a location near the Harrisburg International Airport, which is where Air Force One would land," according to a Pennlive.com report.

The audience won't include Sen. Bob Casey (D-Pa.), whose office didn't get an invitation until an email arrived from the White House yesterday afternoon, according to Casey's spokesperson. His schedule won't allow him to attend the Harrisburg event. Instead, Casey plans to take time during the day to "highlight how 80 percent of the tax giveaways in the president's plan go to the top 1 percent while the middle class will see their taxes increase," said Jacklin Rhoads, Casey's press secretary.

Trump carried Pennsylvania, where Casey faces reelection next year. The president has over the past couple of months delivered tax reform speeches in states he won alongside Democratic senators up for reelection: Sens. Joe Donnelly (D-Ind.) and Heidi Heitkamp (D-N.D.).

WEDNESDAY, IT'S ALREADY HERE, and I'm your substitute host today. Your regular Morning Tax guide, Bernie Becker, will be back later this week.

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TRUMPSPLAINING: The president has often made inscrutable remarks about taxes, and Tuesday brought several instances that required considerable elaboration from Sanders.

Trump kicked off the day with a tweet saying "Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!"

That was a head-scratcher since the NFL gave up its federal tax exemption a couple years ago.
At her briefing, Sanders said Trump was talking about "billions of taxpayer dollars" at the state and local level that subsidize the construction of many stadiums and that "federal tax law doesn't apply here."

Then, at an Oval Office meeting with Henry Kissinger, Trump repeated his oft-used canard that "We are the highest-taxed nation in the world."

But we aren't, as POLITICO's Matthew Nussbaum points out in a dissection of the issue. When that was pointed out to Sanders, she said Trump was just referring to the corporate tax rate.
"That's what he's talking about," she said. "We are the highest corporate-taxed country in the developed economies across the globe."

Adjusting what? Trump also said at the Kissinger meeting "we'll be adjusting" the tax reform plan "over the next few weeks to make it even stronger." That caused a flurry of speculation that he was reopening the framework the White House and Hill GOP leaders unveiled late last month.

But Sanders said Trump was just referring to ongoing discussions about the plan's details.
"There's not a final piece of legislation," she told reporters. "Our priorities remain the same. But the final piece of legislation hasn't been finalized, so this a time of negotiation. But the principles and the priorities that we've laid out are not up for negotiation."

Carrot and stick: Trump also told Forbes magazine that he has "an economic development bill ... which nobody knows about" that would give U.S. corporations "both a carrot and stick" to keep jobs in the U.S.

"It is an incentive to stay. But it is perhaps even more so - if you leave, it's going to be very tough for you to think that you're going to be able to sell your product back into our country," he said. That was reminiscent of Trump's earlier threats to impose an "import tax."

Sanders was coy when asked about Trump's comments, saying that "in addition to the historic tax cuts and regulatory reform, the president is looking at different ways that we can bring jobs and profits back to our shores. That's all I have on that front at this point."

MEANWHILE, ON THE BUDGET FRONT: With the Senate gone this week, there's no floor action on the upper chamber's budget resolution, which advanced out of committee last week as the House budget passed on the floor. Once Republicans on both sides of the Capitol have their respective budgets in hand, they're still expected to merge the two differing documents into one. At least that's still the expectation of House Budget Chair Diane Black (R-Tenn.), who doesn't foresee House members taking what the Senate finishes. House and Senate Republicans are moving independently on their budgets. "The process is that we go to conference," Black said, adding that unless leadership decides differently, that's what'll happen. The head of the House Freedom Caucus agreed. Rep. Mark Meadows (R-N.C.) has no expectation that the House would take up the Senate budget free of mandatory cuts. "That's reporter talk," said Meadows when asked if his caucus would vote for a Senate budget if it became the tax reform vehicle. "I've heard that and no. We're going to conference." Brady, who's scheduled for a Bloomberg Television interview at 1 p.m. today, said he'd introduce tax reform legislation "very soon" after the budget process concludes.

SMALL BUSINESS SKIRMISH: The Job Creators Network is leading an open letter featured in a two-page advertisement in The Hill calling on lawmakers to support the tax framework from the Trump administration and congressional Republican leaders. Part of the group's multimillion-dollar campaign, the letter includes signatories such as former House Speaker Newt Gingrich and numerous business groups like the U.S. Chamber of Commerce.

Absent among the more than 60 names is someone from the National Federation of Independent Business, because of its emphasis on parity between noncorporate passthrough businesses and corporate tax rates, which is inconsistent with the framework, said the president of the Job Creators Network, Alfredo Ortiz. His group "would welcome the NFIB to join their call for tax cuts now if and when they rethink their call for parity," Ortiz said. But the NFIB countered that its members have been out in front on comprehensive tax reform for years, and signed a letter to Congress with more than 200 other business groups in September, including the Job Creators Network. "This is our members' top issue," said Jack Mozloom, media communications director for the NFIB. "We have 300,000 of them, and we survey them every month."

Setting the record straight: Not all small businesses are created equal because not all passthroughs are small businesses, a point being pushed by the Center for American Progress and other left-leaning groups. They'll host a call today with Rep. Bill Pascrell (D-N.J.), a Ways and Means member, to stress that the lion's share of small businesses already pay taxes below the 25 percent ceiling the framework has proposed for all passthroughs. Those groups believe that rate cut would be a boon for top-income taxpayers who could blur the line between business and wage income while doing little for most others. Joining Pascrell on the call will be a Garden State small-business owner.

Now hiring: Speaking of small business, Senate Finance Committee ranking member Ron Wyden (D-Ore.) added to his staff a tax policy adviser for small businesses and passthroughs, Sarah Schaefer. Previously a manager with PricewaterhouseCoopers LLP, she's joining the Democratic staff this week.

INTERNATIONAL UPDATE

FAST ACTION: European Union leaders should commit to quickly putting the digital single market strategy in place and better coordinate on issues surrounding digital taxation, according to an early draft of council conclusions seen by POLITICO. The draft, ahead of next week's European Council meeting, deleted earlier digital tax language, which pledged to "ensure that digitally generated profits in the [EU] are taxed where the value is created," whereas the new text doesn't specify tax enforcement or changes and focuses instead on ongoing negotiations. Pro's Joanna Plucinska and Jacopo Barigazzi have more .

STATE NEWS

JERSEY WARS: In New Jersey, Phil Murphy and Kim Guadagno battled during a Tuesday evening gubernatorial debate over the cost of the Democratic candidate's tax proposals, reports Pro's Katherine Landergan. Murphy's campaign has said that he would raise taxes by about $1.3 billion a year through several changes, specifically through a millionaires tax, closing corporate loopholes and a tax on legal marijuana. Guadagno, the Republican nominee and the state's current lieutenant governor, said Murphy would raise taxes by much more.

REMEMBER KANSAS: Tax cuts for passthroughs are partly to blame for budget woes in the Jayhawk State, as chronicled in a story from The New York Times that leads with an anecdote about blurred income paid to the head football coach at the University of Kansas.

QUICK LINKS:
Not all businesses are planning job creation if tax legislation passes, Reuters reports.

American Action Network's Middle-Class Growth Initiative released an animated digital ad campaign as part of its multimillion-dollar tax reform push in 42 congressional districts.
The Koch brothers-aligned Americans for Prosperity pushed back on the recently released Tax Policy Center analysis of the unified tax reform framework.

More than 156 million consumers and/or their plan sponsors could be affected by the Affordable Care Act's tax on health insurance totaling $21.3 billion, according to a study commissioned for UnitedHealth Group.

DID YOU KNOW?

On this date in 1975, Bruce Springsteen's single "Born to Run" became the popular New Jersey musician's first top-40 hit

** A message from the Secure Family Coalition: American life insurance companies and their financial advisers offer innovative products and services that help 75 million families plan for the future and maintain their peace of mind. These include life insurance, individual annuities, employer-based retirement plans and other long-term financial vehicles like long-term care and disability income insurance. Tax reform should protect the important private sector financial safety net. Learn more at www.securefamily.org. **

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