Tax Cut Math: 6 Republican Senators Have Concerns, It Takes 3 Kill It

Mish

The House and Senate each have different tax proposals. The Senate may not pass anything.

Senate republicans have a 52-48 majority. They can afford to lose at most two votes if they wish to pass tax reform. But as it sits, The Wall Street Journal reports Republican leaders are trying to corral at least half a dozen lawmakers who are voicing concerns.

Senators and Their Key Concerns

  1. Bob Corker: Federal Debt
  2. Jeff Flake: Federal Debt
  3. Ron Johnson: Pass-Through Business
  4. Lisa Murkowski: Health Care Provisions
  5. Susan Collins : Health Care Provisions
  6. John McCain: Defense Spending

Flake/Corker Details

Corker from Tennessee and Flake from Arizona are both retiring. So campaign funding threats are no concern to them. Corker is wary of overstating the benefits, and Flake is wary of optimistic revenue projections.

“We have seen this before,’’ said Flake. “We make the cuts now. We rely on rosy economic assumptions. And then, in the out-years, if those don’t come about, we forget what we were supposed to do in terms of reform.”

Ron Johnson Details

Johnson is concerned about pass-through business tax breaks. The top pass-through rate in the House bill is 25% but some groups are excluded. (I am in the excluded group). In the Senate, the top tax rate is above 30%. Johnson says the Senate version treats “pass-through” entities unfairly and he would not vote for the bill.

Lisa Murkowski/Susan Collins Details

Along with McCain, Murkowski and Collins both voted against health care reform, killing the legislation. Every indication is that they would do the same to tax reform if their demands are not met.

The Senate bill repeals the health care mandate. Murkowski is concerned that repealing the mandate will cause insurance premiums to rise.

Susan Collins wants Congress to pass a bipartisan bill to extend payments to insurers.

McCain Details

McCain does not object to the bill per se. Rather McCain is holding the bill hostage over defense funding. McCain wants at least $700 billion for defense funding for the rest of fiscal year 2018. Congressional leaders may not go along.

Additional Concerns

The Wall Street Journal reports on additional Collins Concerns Over Senate Tax Bill.

Sen. Susan Collins on Sunday recited a list of concerns she had with the Republican tax bill barreling through the Senate, raising pressure on the party’s leadership to slow its progress and make changes to secure passage.“I want to see changes in that bill and I think there will be changes,” the Maine Republican said on ABC’s “This Week,” adding that she hadn’t yet decided to vote against it as it is currently written. On Sunday, Ms. Collins said the Senate bill should reduce the corporate tax rate from 35% to 22%, not 20% as in the current bill, and use the extra revenue to retain the individual deduction for state and local taxes. The Senate bill currently would eliminate that deduction.She also said the top individual tax rate should remain at 39.6%, as in the House bill and in current law, rather than the 38.5% rate in the Senate bill. She said a provision in the Senate bill that would repeal the requirement that most individuals carry health insurance or pay a penalty shouldn’t be part of a final tax package, but if it is included, it should be accompanied by a measure stabilizing insurance markets and lowering premiums. “If you do pull this piece of the Affordable Care Act out, for some middle income families the increased premium is going to cancel out the tax cut that they would get.” she said on CNN’s State of the Union, speaking of the 2010 health care overhaul that enacted the mandate.

Question of the Day

Mike "Mish" Shedlock

Comments (8)
No. 1-8
El_Ted0
El_Ted0

I'm increasingly viewing this bill as the 'Revenge of the Confederate.' They lost the war, yet 150 years later, the Yankees (plus California) are net tax payers into the federal government and the South are net tax takers. These proposals put that inequity on steroids. I've prepared over 25,000 tax returns the past 25 years in NY & NJ. These proposals, if passed, will be catastrophic for suburban voters in these states. If any bill minus SALT deductions ultimately passes, the Republicans will not only lose the House in 2018, they will not win it back for 20 years or more. They can not control the House without some Blue State Congressmen.

Blacklisted
Blacklisted

Even if it passed it would not instill confidense, or stop Europe and Japan from inploding due to a rising dollar, which will also kill exports. It's insane that spending cuts and a balance budget amendment are not part of bill. It's equally insane that state taxes are deductable. What pressure is there for a state to reform? Why can't Floridians deduct the cost of skin cancer treatments?

Advancingtime
Advancingtime

It is quite naive to think legislators polarized and unable to agree upon anything can tackle an issue as complex and divisive as tax reform. Even more outrageous is the idea they can do it quickly. More on why we should be ready for another Washington failure in the article below.

http://brucewilds.blogspot.com/2017/11/tax-bill-if-passed-will-fall-very-short.html

shamrock
shamrock

My personal ass hurt will be around $2500 in the House version. Kill the bill, kill the bill....

JonSellers
JonSellers

As a fairly well-off Floridian with a decent income, low state taxes, and mortgage paid off, this bill is a win for me personally. Heck, my company pays 100% of my healthcare expenses. I'll take the extra dough and stick it in savings and investments for my kids when I croak. Or maybe I'll run it through the slots in Vegas. Thanks DJ!

AlexSpencer
AlexSpencer

Taxes are high because of out of control spending on non'-productive projects. Years of observing these tax cut efforts have shown that they are basically tax shifts. Taking taxes off the wealthier and dumping them on the poorer. Regan's cuts required a doubling of the labor tax to continue funding defense boondoggles. The new strategy is debt increases. Bush's cuts sold as temporary were made permanent by a gutless congress. Just as these cuts for the middle class supposedly temporary will be made permanent. Continuing the debt explosion by not collecting the taxes the government is too ashamed to collect. This massive future debt soon will consume all government revenue. With revenue used up by interest payments there will be nothing left pay social security forcing repudiation of trust fund obligations. A problem compounded by the anti family aspects of the current legislation .

AlexSpencer
AlexSpencer

a

lol
lol

don will rack up as much dept in 4 years as barry did in 8,he'll be first president to breach (officially) the 2 trillion in annual deficit in 2018 and just might hit the magical 3 trillion in annual red ink before shown the door in 2020


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