Senate tax plan will not pay for itself, says new JCT report

02 December, 2017, 01:30 | Author: Diane Mills
  • 'We haven't had time to read it': Republicans defeat Democrat pleas to adjourn the vote on tax reform because they only had four hours to read the 500-page, small print bill

Donald Trump's sweeping tax reform plan overcame resistance Friday from Republicans concerned about its high cost, setting up a Senate vote that could give the U.S. president his first major legislative victory. GOP leaders' main concern was winning over the hawks anxious about adding more red ink to the mounting $20 trillion deficit. Jeff Flake, R-Ariz., announced that he would support the bill.

Republican Senator Susan Collins, another holdout, said a deal had been reached to include her unspecified property tax deduction amendment in the Republican tax bill.

"We have the votes", he told reporters.

A GOP summary obtained by The Associated Press showed that to pay for the changes, the new plan would scale back several tax cuts. The plan would also increase a one-time tax on profits that US -based corporations are holding overseas and require corporations to continue paying the business version of the alternative minimum tax.

What wasn't clear Friday afternoon was what, if anything, Sen. After holding out for almost an hour during the vote, Corker, Flake and Johnson eventually joined fellow Republicans to scuttle the Democratic proposal. Steve Daines, R-Mont., another "yes" vote, had been demanding better business tax breaks. President Trump has said he wants to sign a bill by Christmas.

Senate passage would push Congress a step closer to the first rewrite of the nation's tax code in three decades.

Earlier Thursday, a nonpartisan congressional tax scorekeeper had projected that the tax overhaul would add $1 trillion to the deficit, even after accounting for expected economic growth from the plan.

In other words, the tax bill won't pay for itself, even considering growth, as Republicans claimed it would.

Trump has attacked Corker and Flake on Twitter. Corker, along with Flake and Johnson, threatened to hold up the bill on Thursday after the Senate parliamentarian ruled that his "trigger" proposal ― which would have brought back certain taxes if the government failed to meet specific revenue targets ― could not be included in the reconciliation bill.

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The leaders were making major changes up to the last minute, including one that would roll back some of the tax cuts after six years to appease deficit hawks - notably Sens. Bob Corker, R-Tenn. His job is to count and marshal votes for Republican measures.

Another faction to be reckoned with: senators supporting millions of businesses whose owners report the firm's profits on their individual tax returns. "That disparity between the USA tax code and foreign tax rates has literally chased jobs and wages out of this country".

Johnson said Friday that he was won over after GOP leaders offered to boost that deduction to 23 percent. That unexpected turn cast into doubt the support of Corker and Flake, prompting Senate leaders to call off plans to vote Thursday night.

Massachusetts Senator Ed Markey accused Republicans of mounting a "con game" in which they tout tax breaks but gloss over "their brutal, vicious cuts to programs for the poorest, the sickest, the elderly, neediest in our country".

After months of negotiations and false starts, Republicans finally seem prepared to pass their most sweeping rewrite of the US tax code in three decades.

The tax plan would cut corporate taxes from a maximum rate of 35 percent to 20 percent.

Some Democrats agreed that US corporate taxes should be lowered, but insisted the Republican plan goes too far and would eventually trigger painful cuts to federal programs that benefit the poor and elderly in the future.

The deduction for state and local taxes would be in greater danger because it's in the crosshairs of both bills: The House's limits it, and the Senate's ends it outright.

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