Everything You Need To Know About Tax Reform Is In This One Sentence

There's just one thing you really need to know about whether tax reform will happen by the end of this year: It's about to take a very small group of senior policymakers more than six months to agree on the broadest of principles for what a tax reform plan should do...and the broad principles will be the easy part.

Or as Senate Finance Committee Chairman Orin Hatch told CNBC last week, tax reform is going to be "much harder than health care." Reminder: the effort to repeal and replace the Affordable Car Act didn't go all that well.

So how long is it going to take the House and Senate to deal with tax reform?

In spite of the nuanced optimism you hear from The Gang of Six, it's very likely to take much longer than it did for those six people -- only four of who actually have votes -- to agree on the generalities.

Every one of the 535 members of Congress has individual and corporate taxpayers in his or her district or state and the nitty gritty, deep-in-the-weeds details will be extremely important to each representative and senator. At the very least they will all want to appear to have had an impact on the final product so there will be multiple time-consuming amendments offered both in committee and on the House and Senate floors.

In other words, the tax reform debate almost can't be quick.

In that same CNBC interview, Hatch said that, as soon as the outlines of the bill are revealed, there will be a “doubling and tripling of the ideas of (senators) who have been waiting for a long time… to put their own ideas and imprint on (the tax bill).” And there's absolutely no guarantee that senators who don't get at least the opportunity to propose what they want for her or his state will vote for the final bill just because Donald Trump or the congressional leadership ask them to do it.

The fight over the 1986 tax act is the obvious very relevant example. That legislative process took almost three years to complete even after there was a general consensus that the bill should be deficit neutral and the Treasury had developed a proposal for Congress to use as a starting point. Whether or not they were on a tax-writing committee, every representative and senator needed to show his or her constituents they had at least tried to represent their interests. Many opposed early versions of the bill because it was the best way to demonstrate to voters they were on their side.

What else could slow tax reform?

The budget process will be a major drag on progress. The congressional leadership is hell-bent on using reconciliation, so Congress will first have to adopt a fiscal 2018 budget resolution before the tax reform debate can begin by the full House and Senate. As I explained last week, Congress agreeing on a budget resolution won't be easy and isn't guaranteed.

If a tax bill is eventually agreed to, Congress will need to draft and agree on transition rules that help companies and individuals shift their activities from the old to the new system before the final package is approced. That took close to a year during the fight over the 1986 tax act.

Finally, communications are very different today than they were in the 80s so the tax reform debate will be covered both more intensively and immediately. In the 1980s, Fox News, MSNBC and CNBC didn't exist at all; CNN had been around for less than a decade; Bloomberg terminals were just getting started; and Twitter hadn't yet been created.

Add texting and email and it's clear that everything mentioned, debated, agreed to and rejected during the tax debate will be known and reacted to instantly by interest groups and individual voters. Opposition to what is being considered will be obvious and instantaneous.

So just how long will it take tax reform to happen? Next year is far more likely than 2017, and 2019 may be even more likely than 2018. It's also very possible it may not happen at all.