WASHINGTON, D.C. – The United States Senate unveiled their tax plan on Thursday and true to form watered down the tax reform expectations with a delay in the corporate rate cut and submission to the home building/selling lobby with mortgage deductions.
The more the Senate version differs from the House, the longer the horse trading will drag on making it less likely it can be accomplished this year. Trump adviser Gary Cohn has already said it would not be retroactive for 2017, so the calendar goal may not matter as much as it would have.
From the Washington Post:
“Senate Republicans are forging their own path on the GOP effort to overhaul the U.S. tax code, preparing a plan that would delay President Trump’s top business priority and blow up House Republicans’ carefully crafted compromise on state and local tax deductions.
GOP Senate leaders on Thursday plan to unveil legislation that would delay cutting the corporate tax rate from 35 percent to 20 percent until 2019, four people briefed on the planning said, a major departure from Trump’s insistence on immediate changes that he says are necessary to spur the economy.
The one-year delay would lower the cost of the tax bill by more than $100 billion, and negotiators are trying to preserve as much revenue as they can for other changes. But it could also delay decisions by companies to move back to the United States from overseas or have companies hold off on other decisions as they wait for the corporate rate to fall.
One year saves $100 billion? What’s to keep the Swamp from using such justifications over and over again until the final tax bill looks like a shadow of its former self? Between the addiction to more revenue and special interest carve outs it’s hard for Capitol Hill to wean itself off spending evermore of taxpayers’ money, and that unfortunately comes as priority number one.
Normally you could relay on a Liberty Leader like Sen. Rand Paul (R-KY) to chime in with some well reasoned appeals for bold tax reform right away. Instead Paul is recovering from six broken ribs and injured lung after being attacked by a Leftist nut neighbor, but that’s another story.
Beyond the decidedly Establishment lean in the Senate tax plan, it still has to grapple with the deliberately tricky process complicated more by arbitrary static limits and a few lame duck senators intent on poking Trump in the eye.
“Senate lawmakers also must grapple with strict rules that regulate how a tax-cut bill is designed. To avoid a filibuster from Democrats, Republicans must write a bill that does not add more than $1.5 trillion to the debt over 10 years.
Several Republicans, Sens. Bob Corker of Tennessee, Jeff Flake of Arizona, and James Lankford of Oklahoma, have said they would not support a tax plan that adds too much to the debt, creating a bloc of votes that would be able to kill the bill if they aren’t appeased.
The tax cuts have been embraced by many of the United States’ largest companies but opposed by thousands of smaller firms.
Even though the House and Senate must pass identical bills in order for tax cuts to become law, many White House officials are paying particularly close attention to the details of the Senate bill, convinced that a final deal will most likely resemble that measure.”
The clock is ticking on Republicans to put up a policy win ahead of 2018 elections. Hopefully the American people can get a meaningful plan that reduces the tax burden, but it looks more likely that we’ll get a Christmas time Frankenstein straight from the Swamp.
Read more about differences in the Senate tax plan here.