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That "phenomenal" tax reform plan President Trump promised back in February is going to take longer than anticipated, though the White House continues to insist it will arrive before the end of the year.

Trump has scrapped the plan he campaigned on and is going back to the drawing board on tax reform in hopes of devising a proposal Republicans—and perhaps even Democrats—can get behind, reports the Associated Press. Administration officials are also saying that a tax overhaul will happen by the end of the year—not this spring, as Trump seemed to indicate in February—or perhaps even in August, the deadline set by Treasury Secretary Steve Mnuchin.

Markets appear unshaken by the news, with major U.S. indexes opening in modestly positive territory on Monday. Republicans in control of the White House, Senate and House of Representatives has been cause for optimism among investors eager to see earnings-boosting tax reform, though confidence has waned in recent weeks.

Equities saw sizable outflows to kick off the second quarter last week. Mutual funds posted $7.4 billion in outflows, $4.7 billion from domestic funds and $2.7 billion from international funds, according to research from Goldman Sachs. Equity ETFs saw outflows of $4.5 billion, the weakest figure since September, while fixed income saw funds flowing in.

That tax reform will take some time does not necessarily come as surprise, as many have observed that the Trump team's initial timeline has been overly optimistic. But the fact that the administration is starting from square one is some cause for consternation.

"It's a little frustrating that they feel they have to write a new tax plan when they have a tax plan," Stephen Moore, an economist at the conservative Heritage Foundation who served as an adviser to the Trump campaign, told the AP.

Press Secretary Sean Spicer in a briefing with reporters on Monday pushed back against the AP report slightly. He said that what Trump put forth on the campaign trail remains the "backbone" of what he wants to get done.

"This is going to be a major undertaking," he said, explaining that the president is seeking advice several parties on the matter. He said it would be a "great opportunity" to get a package through by August, but "we're going to make sure that we do this right."

Trump campaigned on a pledge to reduce the corporate tax rate to 15% and enact a repatriation holiday allowing companies to bring corporate profits abroad back to America at a 10% rate. Most agree that such a dramatic reduction from the current 35% corporate rate is unlikely.

"Getting it done well and getting it done right is more important than getting it done soon," said Gary Cohn, director of the National Economic Council, in an interview with Bloomberg on Friday. He signaled the White House would be trying to work with Congress on "one cohesive plan" on taxes and said he doesn't "know if it's August or not" in terms of timeline.

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One of the principal questions at hand is whether the GOP will seek tax cuts or tax reform—in other words, will they just reduce rates, or will they try to implement other measures to raise revenues as well?

The border adjustment tax, a measure proposed by House Republicans that taxes imports and exempts exports in an effort to raise $1 trillion over 10 years, has become a matter of heated debate on Capitol Hill on the revenue side.

The AP reports other options to raise money are being shopped on the Hill as well, including one that would create a sort of value-added tax by eliminating the deduction of labor expenses. Eliminating interest deductibility has been floated by Congressional Republicans. The Trump administration has reportedly swatted down a carbon tax to raise revenues.

Goldman Sachs analysts in a note on Friday outlined the complexities in the tax cuts vs. tax reform debate. Their conclusion: if the GOP can't agree on a budget resolution, or if their resolution dictates revenue-neutral reform, the odds that Congress will enact meaningful tax legislation by early 2018 are low. (The GOP has indicated it will use budget reconciliation for tax reform, which requires a simple, 51-vote majority, not 60 votes, which would be needed to avoid a filibuster.)

Goldman holds that the GOP will probably choose to pass a tax cut that includes some elements of reform and some other tricks to get it the go-ahead—namely, dynamic scoring, a way of evaluating tax changes through the prism of macroeconomic feedback. Essentially, it assumes tax cuts are good for the economy.

"Dynamic scoring can help make tax cuts appear budget-neutral, but is not a panacea," analysts warned.

But the United States' fiscal situation is much worse today than it was at other moments when Washington passed tax cuts in 1981 under Reagan or in 2001 under Bush. The current debt-to-GDP ratio is 76.6%, compared to 31.4% in 2001 and 25.1% in 1981. That in itself might not be as much of a concern if the economy weren't so close to full employment as to lead the the Federal Reserve to begin tightening monetary policy to head off higher inflation. 

The White House is expected to release its budget submission to Congress in May and in that provide at least an outline of what it's seeking in terms of taxes. That, and unfolding work on Congressional budget committees' 2018 budget resolutions, will be the next indicator of what may be to come and when.

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What will move markets this quarter and how should investors position themselves ahead of time? Jim Cramer sat down with four of TheStreet's top columnists recently to get their views. Click here to listen to his latest Trading Strategies roundtable with them and read their advice for stocks, bonds, forex, tax reformand gold.

Updated with comments from Sean Spicer.