Senators Scramble to Advance Tax Bill That Increasingly Rewards Wealthy | Nigeria Newspaper- Nigeria News| Naija News

28.11.17

Senators Scramble to Advance Tax Bill That Increasingly Rewards Wealthy

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Several Senate Republicans loom as potential roadblocks to the tax bill, including Senators Bob Corker of Tennessee, center, Ron Johnson of Wisconsin, right, and Jeff Flake of Arizona. Credit Pablo Martinez Monsivais/Associated Press
WASHINGTON — The Republican tax bill hurtling through Congress is increasingly tilting the United States tax code to benefit wealthy Americans, as party leaders race to shore up wavering lawmakers who are requesting more help for high-earning business owners.
On Monday, as Republican lawmakers returned to Washington determined to quickly pass their tax overhaul, senators were in feverish talks to resolve concerns that could bedevil the bill’s passage. With pressure increasing on Republicans to produce a legislative victory, lawmakers are contemplating changes that would exacerbate the tax bill’s divide between the rich and the middle class.
Those include efforts to further reward certain high-income business owners who are already receiving a tax break in the Senate bill but who are at the center of a concerted push by conservative lawmakers and trade groups to sweeten those benefits.
As Republican leaders pressed for a Senate floor vote this week, there appeared to be little momentum for amendments that would help low-income Americans, which some Republican and many Democratic senators had sought.
The Congressional Budget Office said this week that the Senate bill, as written, would hurt workers earning less than $30,000 a year in short order, while delivering benefits to the highest earners throughout the next decade. Those estimates echo other analyses, like that by the Joint Committee on Taxation, which have found the biggest benefits of the bill increasingly flowing to the rich over time. By 2027, the budget office said, Americans earning $75,000 a year and below would, as a group, see their taxes increase, because individual tax cuts are set to expire at the end of 2025.
At the heart of the debate is whether to more favorably treat small businesses and other so-called pass-through entities — businesses whose profits are distributed to their owners and taxed at rates for individuals. Seventy percent of pass-through income flows to the top 1 percent of American earners, according to research by Owen Zidar, an economist at the University of Chicago’s Booth School of Business.

Two Republican senators, Ron Johnson of Wisconsin and Steve Daines of Montana, have said that they will vote against the plan if it does not do more to help the owners of those businesses, possibly by increasing the individual income tax deduction for such owners from the 17.4 percent rate currently in the Senate bill.
Republicans, who control the Senate 52 to 48, can afford to lose only two of their members if they hope to pass the bill on party lines in the upper chamber.
Mr. Johnson could stall the bill by himself on Tuesday, when it is scheduled for a vote in the Senate Budget Committee. Mr. Johnson sits on that committee, where Republicans have a single-vote majority. On Monday, he said he would vote “no” unless his concerns were addressed.
“I need a fix beforehand,” Mr. Johnson said.
Earlier in the day, Senator John Cornyn, Republican of Texas and the majority whip, said, “There’s no deal, but there’s been some discussions on how to address Senator Johnson and Senator Daines’s concerns.” He continued, “We’re trying to be responsive.”
Adding to the uncertainty, Senator Bob Corker of Tennessee also said on Monday that he could be a “no” vote in the Budget Committee if his concerns about the bill’s effect on the deficit were not adequately addressed.
Orrin G. Hatch, Republican of Utah, who leads the Senate Finance Committee, said that there was a strong desire to get a bill passed by Friday and that additional changes would most likely be made on the Senate floor. Despite speculation that the House will face pressure to quickly vote upon whatever passes in the Senate, Senator Rob Portman, Republican of Ohio, said he “fully expects” that there would be a conference to bridge differences between the House and Senate plans.

The pass-through fight is the first skirmish in what lawmakers and lobbyists expect will be a frenzied week, which Republican leaders hope will produce the first major legislative victory of the Trump-era for their party.
The week is expected to be punctuated by behind-the-scenes arm twisting and deal making as party leaders work to allay senators’ worries without exceeding their self-imposed $1.5 trillion budget for tax cuts. At least a half-dozen senators have raised concerns about the bill, including its potential to add to the federal deficit and a provision that would eliminate the Affordable Care Act requirement that most Americans have health insurance or pay a penalty.
Many of those senators are in discussions with party leaders over how to tweak the bill to address their concerns. James Lankford, Republican of Oklahoma, said on Monday that he was in talks over a proposal meant to ensure the tax plan did not balloon the deficit. Mr. Lankford said the Senate was discussing inserting a provision that would lead to tax increases — as yet unspecified — after a period of years if federal revenues fell short of lawmakers’ projections.

“To me,” Mr. Lankford said, “the big issue is how are we dealing with debt and deficit, do we have realistic numbers, and is there a backstop in the process just in case we don’t?”
Mr. Corker and Senator Jeff Flake of Arizona, who has also expressed concerns about the bill’s costs, said on Monday that they were similarly interested in some type of trigger or backstop.
Some other senators’ concerns appear less likely to be addressed. Mike Lee of Utah and Marco Rubio of Florida, for example, appear to be making little progress in persuading party leaders to expand access to the child tax credit for low-income families, by allowing the credit to be refundable against payroll tax liability. Such a move would allow working parents who do not currently face income tax liability to still benefit from the expanded credit envisioned in the bill.
On Monday, several Republicans from the Senate Finance Committee, including Mr. Hatch, emerged from a lunch with President Trump at the White House saying that they were confident they would have the necessary votes to pass the package this week and would be able to resolve differences with the House version so that the bill could be signed into law in short order.
“We’re generally able to get together and solve these problems,” Mr. Hatch said of the House and Senate.
White House officials privately said that they hoped the two chambers could resolve their differences privately and informally to avoid a potentially lengthy and divisive formal conference that typically is needed to complete major legislation.
Asked whether the legislation could be completed by Christmas, Mr. Hatch said, “I hope so.”
He added that Democrats should “get off their duffs” and support the plan. Mr. Trump, for his part, said later in the day that he was not interested in getting Democratic support.
At an event in the Oval Office honoring Navajo code talkers from World War II, Mr. Trump boasted that the package would be “a tremendous tax cut, the biggest in the history of our country” and predicted that there would be “great receptivity” to it.

“If we win, we’ll get some Democratic senators joining us,” he said. “But I’m not so interested in that. We’re really interested just in getting it passed.”
Mr. Trump is expected to go to Capitol Hill on Tuesday to have lunch with Republican senators before meeting with the top congressional leaders from both parties in the afternoon.

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