It's High Noon for Tax Reform. As of Noon Friday, no more changes can be made to the bill. Once the House-Senate conferees sign the report, it's locked in. There can be no last minute deals or amendments, or changes.
Are the votes there?
Rubio's Last Stand
At worst for Republicans, Sen. Marco Rubio’s opposition to their tax package sinks the bill. If he remains opposed, as does, say, Sen. Bob Corker (R-Tenn.), only one more Republican defection would mean failure.
But at best, Rubio’s last stand is ensuring the tax debate concludes on a politically sour note for his party. His gripe, after all, is with the measure’s stinginess toward the working class even as it strains at the seams with goodies for corporations and the wealthy.
Polls show Americans mostly think the bill skews its benefits to the well-heeled. More than three-quarters of respondents to a CBS News survey this month said it would benefit corporations, while less than a quarter said it would help their own family (and 69 percent said it would help the wealthy.) And a USA Today-Suffolk University poll released Sunday found 64 percent said the wealthy will get the most benefits, while just 17 percent said the middle class will.
For industries that pay a particularly high effective tax rate under the current system, however, the bill looks like a major win. Included in that group: big Wall Street banks.
GOP Increases Child Tax Credit
Republicans will make more of the child tax credit refundable in a last-minute concession to Sens. Marco Rubio (R., Fla.) and Mike Lee (R., Utah), potentially clearing one of the last big hurdles to passing the plan.
Taxpayers without income-tax liability will be able to get $1,400 of the $2,000 per-child credit, said Rep. Kristi Noem (R., S.D.), one of the members of the House-Senate negotiating committee. That’s up from $1,100 in the version that passed the Senate.
It wasn’t clear early Friday if that change was enough to get the two senators’ support, and it wasn’t clear where Republicans found the money. Republicans set themselves a $1.5 trillion cap on their tax cut, and exceeding that would prevent them from passing the bill without Democratic votes in the Senate.
Mr. Rubio, who voted for the Senate bill, had been objecting to changes Republicans have discussed since then. GOP leaders were willing to set a 21% corporate tax rate instead of 20%, and lower the top individual tax rate to 37% without changing the child credit. The Senate rejected his attempt to set the corporate tax rate at 20.94% to increase refundability.
Ms. Noem said Mr. Rubio hadn’t personally told her he would now support the bill, but she thought the boost would be enough to get him on board. The refundable piece of the credit is important to very low-income families, who pay payroll taxes but often don’t owe income taxes.
“We have not seen bill text, and until we see if the percentage of the refundable credit is significantly higher, then our position remains the same,” Olivia Perez-Cubas, a spokeswoman for Mr. Rubio, said Friday morning.
A spokesman for Mr. Lee said their office hadn’t yet seen the text of the bill.
- Rubio and Lee threaten to sink a bill over child tax credits. The committee expanded the credit by a mere $300 per year, per child. We are talking peanuts here compared to the Wall Street bonanza.
- The same Republicans who locked up the government under Obama for a month in a failed bid to prevent a hike in the debt ceiling, now thinks it's OK to increase debt by $1.5 trillion.
- The average tax benefit for the average person making $100,000 a year is a mere $100.
Corker, Collins Fed Pack of Lies
Republicans leaders told Senator Bob Corker the bill would not raise national debt. It was on those grounds the bill made it out of the Senate Finance Committee on an 11-10 vote.
Republicans leaders also promised Susan Collins a bipartisan healthcare bill for her vote. That was a lie too.
Now Corker alone cannot stop the bill.
I am all in favor of tax "reform". However, the bill is anything but reform.
It does not kill the Alternative Minimum Tax, it has eight brackets vs four in the House version, and beyond 2027 it does not lower individual taxes at all.
Spend Your $100 Wisely
This bill deserves to die, and the vast majority of the American public knows it.
Please call the U.S. Capitol Switchboard at (202) 224-3121*. A switchboard operator will connect you directly with the Senate office you request. Tell them you do not want the tax bill to pass.*
Make two calls. One to each of your Senators. Have your friends do the same. Let them know how you feel about this bill!
Mike "Mish" Shedlock