Tomorrow, President Trump and Senate Republicans are expected to unveil a tax proposal that will cut tax rates for corporations, raise taxes on millions of working families, and increase the deficit by over $1 trillion.

But President Trump has been quietly rigging the tax system for months:

—The Administration rolled back a tax rule designed to curb “earnings stripping” and prevent foreign corporations from avoiding paying taxes.  In 2016, the IRS finalized a rule to prevent “earnings stripping,” whereby foreign corporations load high-interest debt on American subsidiaries to conceal profits and avoid paying taxes.  In August, the Trump Administration delayed the rule’s reporting requirements, eliminating any real ability to enforce the rule.  The move puts foreign companies at an unfair advantage over American businesses that can’t offshore profits to avoid taxes.

SIDEBAR: The Administration’s roll back was illegal.  The rule’s reporting requirements were delayed without providing legally-required notice and an opportunity to comment. And the Administration’s justification for the delay – that corporations need more time to “comply” with the reporting requirements – ignored the ample time IRS already provided for preparation in 2016, making the move arbitrary and capricious.

—President Trump is re-opening a loophole that allowed corporations to skirt taxes when selling assets like hotels and casinos.  In 2016, Treasury and IRS issued rules to prevent companies from inappropriately claiming that a large share of an asset’s value is “intangible,” and thus under federal law, not subject to taxes when sold to a foreign company.  The Trump Administration is planning to roll back the rules.

SIDEBAR:  Trump family assets – like hotels, casinos, and golf courses – have relatively high intangible value.  For example, in 1994, an appraisal of the Trump Taj Mahal estimated that its intangible “going concern value” (i.e. the value of the casino’s ability to earn profits from ongoing operations) was $1.1 billion.  If the Trump family were to sell similar assets to foreign investors in the future, this move could allow them to evade taxes.

—The Administration re-opened a loophole that allows wealthy families to decrease their estate taxes.  In October, the Trump Administration withdrew a proposed rule designed to prevent wealthy families from undervaluing corporations and partnerships for purposes of the estate tax.  The IRS had originally claimed the rule was necessary because “taxpayers have attempted to avoid” paying taxes on the value of inherited voting and liquidation rights in a company.

SIDEBAR: Based on current disclosures, President Trump and his family will likely benefit from this change, as will other Administration officials with significant interests in large family-controlled corporations, such as Betsy DeVos (who disclosed interests in the REDV Family Limited Partnership worth between $11 million and $55.5 million), Wilbur Ross (who was a General Partner in Ross Expansion FLP, and whose divestment is uncertain), and Gary Cohn (who has a private investment in DBG GROUP, LTD.).

—The Administration rolled back an IRS plan to make it easier to find tax cheats.  In 2016, the IRS finalized regulations that allow the agency to contract with third parties, including attorneys, to assist in tax enforcement if done in the presence and under the guidance of IRS officers.  The Trump Administration intends to roll back the rule and limit IRS’ ability to properly enforce federal tax law by leveraging outside support and expertise.

SIDEBAR: Robust IRS enforcement is a crucial and cost-effective tool for ensuring tax-evaders are held accountable and government operations are fully funded.  In 2015, the IRS noted that a one-percent decline in the compliance rate of taxpayers would cost the government $30 billion.