Senate panel approves GOP tax plan
The Senate Finance Committee late Thursday approved the chamber’s GOP tax bill, after the House passed its measure earlier in the day.
The panel voted to send the tax plan to the full Senate on a party-line vote of 14-12.
“For the millions of hard-working Americans who need more money in their pockets and the chance of a better future, help is on the way,” Senate Majority Leader Mitch McConnell (R-Ky.) said in a statement.
“When the Senate returns after Thanksgiving, I will bring this must-pass legislation to the floor for further debate and open consideration,” he said.
The bill, as modified by Finance Committee Chairman Orrin Hatch (R-Utah) during the four-day markup, would temporarily cut taxes for individuals while permanently slashing the corporate tax rate from 35 percent to 20 percent. It also would repeal ObamaCare’s individual insurance mandate.
The individual tax cuts would expire after 2025 in order to comply with a rule that requires the bill to not increase the deficit after 10 years if it is to pass the full Senate on a simple majority.
Republicans praised the measure, arguing that the tax cuts and the mandate repeal would help the middle class.
“This is a good bill that delivers on our promise to provide middle-class tax relief and grow our economy,” Hatch said shortly before the vote.
Democrats attacked the bill for providing temporary tax cuts for individuals but permanent cuts for corporations while arguing that repealing the individual mandate would result in millions fewer people having health insurance. They also criticized the process of considering the legislation as rushed.
“I think this is indefensible, partisan legislation,” said Ron Wyden (Ore.), the top Democrat on the Finance Committee.
Republicans and Democrats on the panel argued over the Joint Committee on Taxation (JCT) analysis on the distributional effects of the bill.
The JCT found that when including a repeal of the individual mandate, the bill would increase taxes on average for those making $20,000 to $30,000 starting in 2021 because fewer people would enroll in a health insurance plan, for which they would receive tax credit subsidies.
The committee also found that income groups under $75,000 would on average receive tax increases in 2027 because of the expiring individual tax cuts.
Democrats viewed the report as bolstering their case against the bill. But Hatch said that taxes appear to be going up for lower-income families because of a “scoring assumption” and noted that the bill doesn’t bar access to the subsidies.
“Anyone who says that we’re hiking taxes on low-income families is misstating the facts,” he said.
Democrats offered a slew of amendments, including some relating to health care and some designed to highlight what they perceive as flaws with Republicans’ tax efforts. For example, Wyden offered an amendment to make the individual tax cuts permanent and sunset the corporate tax changes.
The Democrats’ amendments were defeated by Republicans or ruled not to be germane.
The bill is expected to be considered on the Senate floor the week after Thanksgiving, where Republicans have little margin for error. If no Democrats vote for the bill, Republicans can only afford to see two GOP defections.
So far, Sen. Ron Johnson (R-Wis.) is the only GOP senator who has come out against the bill. He has expressed concerns that the bill doesn’t treat pass-through businesses such as partnerships and sole proprietorships as well as it treats corporations.
Sens. John Cornyn (R-Texas) and John Thune (R-S.D.) both said there would be continued work in the pass-through area.
Sen. Susan Collins (R-Maine), who voted against the Senate GOP’s scaled-down ObamaCare repeal, has expressed concerns about including individual mandate repeal in the bill, while several GOP lawmakers have raised concerns about the bill’s impact on the debt. But so far, they have not taken a hard stance against the bill.
If the Senate is able to pass its bill, the measure would have to be reconciled with the House bill, which has some significant differences.
The House bill would likely add to the deficit after 10 years, does not include repeal of the individual mandate and does not sunset most of its changes to the individual tax code. It also keeps a deduction for property taxes up to $10,000 that the Senate bill would eliminate.
Peter Sullivan contributed