19/12/17

Republicans close in on historic tax reform

(Washington Examiner) -- House and Senate lawmakers on Tuesday will begin passing the first major overhaul of the tax code in more than 30 years, and plan to send the legislation to President Trump by mid-week.

Republicans appear to have maintained near-unanimous support to pass the legislation, despite efforts by Democrats to build public opposition to the measure by labeling it a tax cut for the rich that will explode the deficit.

“We’re closer than ever to seizing this once-in-a-generation opportunity to update our tax code, make Americans stronger and help middle-class families keep more of their hard-earned money,” Majority Leader Mitch McConnell, R-Ky., said Monday.

The House expects to vote on the bill first, sometime around noon, GOP aides said Monday. The Republican majority is expected to pass it without any Democrats and with just a handful of GOP defections.

GOP lawmakers huddled late Monday in the Capitol basement, where they thunderously applauded the plan behind closed doors.

After House passage, the Senate will start ten hours of debate before a final vote late Tuesday or early Wednesday, said Majority Leader John Cornyn, R-Texas.

“We will get it on the president’s desk to sign it into law before Christmas, as we pledged,” Cornyn said Monday.

Senate Republicans have signaled they can pass the bill without losing any votes, although Sen. John McCain, R-Ariz., will be absent due to an illness contracted over the course of his cancer treatment, and Sen. Jeff Flake, R-Ariz., has not announced how he will vote.

Vice President Mike Pence postponed a trip to the Middle East in order to be close by if GOP votes come up short in the Senate. But Pence is allowed to cast a vote only in the case of a tie, and with McCain absent, only 99 senators will be on hand to vote, making a tie impossible unless someone else doesn't show up.

Neither House nor Senate Democrats have budged in their opposition to the measure, despite early signs that some Senate lawmakers from states Trump won might be willing to negotiate.

Democrats drew early red lines and refused to negotiate on any bill that lowered taxes on the wealthy. They also oppose a provision in the bill that ends Obamacare's individual mandate penalty, and would have insisted on higher corporate tax rates.

“Let me just say, if by some miracle our Republican colleagues get the good sense to vote this package down and really help the middle class instead of just helping the wealthy, we Democrats will be there,” Minority Leader Chuck Schumer, D-N.Y., said Monday. “They’ll find a Democratic leader and a Democratic party that’s willing to work with them on real, bipartisan tax reform.”

By late Monday, however, the Senate GOP appeared confident they would pass it without any Democrats, as key Republican senators announced support for the legislation.

Sen. Susan Collins, R-Maine, said Monday she will back the bill. Republican leaders won over Collins by agreeing to several changes to the Senate bill, including the allowance of either a local property or local income tax deduction of up to $10,000 for individual filers.

The original Senate bill had stripped out deductions for state and local income and property taxes.

Collins also secured a vote on a separate bill that will shore up Obamacare subsidies. It’s likely the Obamacare provisions will be included in a must-pass government spending bill later in the week.

“While it is no means perfect, on balance this reform bill will provide much-needed tax relief,” Collins said on the Senate floor Monday. “It will benefit low and middle income families while spurring the creation of good jobs and greater economic growth.”

Sen. Mike Lee, R-Utah said Monday he also plans to vote yes. Lee, along with Marco Rubio, had been withholding their support until Republicans agreed to make the legislation’s child tax credit more accessible to lower-income earners.

Now both lawmakers are on board.

“It will cut taxes for working Utah families,” Lee said. “I will proudly vote for it.”

Sen. Bob Corker, R-Tenn., will also vote for the bill, aides said Monday. Corker voted against the Senate version on Dec. 2 but announced Friday he will vote for the House-Senate compromise.

Corker remained a “yes” after a Sunday media report claimed he switched his vote because of a tax cut provision added to the measure that would enrich him. He denied knowing about the provision, which was the subject of an International Business Times story.

Cornyn said the media outlet “spread a false story irresponsibly and dishonestly.” The IBT stands by its story.

In the House, GOP defections will be largely limited to lawmakers from New York, New Jersey and California, where state and local property taxes are among the highest in the nation.

The tax bill would give individual filers the choice of claiming a deduction for state income tax, or local property tax but not both. And it caps the amount at $10,000.

Reps. Leonard Lance, R-N.J., Darrell Issa, R-Calif., and John Faso, R-N.Y., are among the lawmakers who say they will vote "no."

“While there has been positive progress, I still cannot vote for the conference committee package due to my overwhelming concern with the state and local income tax deduction,” Faso said Monday.

House and Senate Republicans scheduled final votes on the bill after the two chambers agreed Friday to a deal that blended separate House and Senate tax measures.

The final bill maintains seven tax brackets at lower rates, and slashes the corporate tax rate from 35 percent to 21 percent, effective in February. The legislation also ends the Obamacare mandate by eliminating the fine imposed on those who do not purchase health insurance plans.

The bill increases the standard deduction to $12,000 and raises the child tax credit to $2,000, of which $1,400 is refundable against payroll taxes. That change should vastly simply the act of filing taxes for millions of people around the country.

The final bill restores the medical expense deduction and student loan interest deductions that had been stripped from the House version and maintains the charitable contribution deduction. It also maintains the mortgage interest deduction and caps it at $750,000.

Republicans have been working for months, mostly behind closed door to come up with a plan to reform the tax code that could win over enough votes to pass both chambers with only Republican support.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, compared the effort to solving a Rubik’s Cube.

“We’ve figured out how to solve the Rubik’s Cube,” Cornyn said Monday. He admitted the bill isn't perfect, but said it's "good."

“And it’s much better than the status quo, which our Democratic colleagues seem to have settled for," he said.