A tax plan in two weeks? With President Trump demanding quick action. the White House and GOP leaders now say they’ll have a plan by the week of September 25. And they want a committee vote in October. But their plan may still leave out many key details. House Ways & Means Committee Chair Kevin Brady told reporters yesterday that it would be “a consensus document with the core elements of big, bold tax reform.” That doesn’t sound like a bill. In the meantime, Congress must reach a budget deal if the GOP is going to try to pass a tax bill without Democratic support.
Could it be a bipartisan? The President met yesterday on tax reform with groups of Democrats including his new best friends—Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi. He said his Tuesday dinner was a “highly productive” bipartisan meeting. Democrats sounded more cautious, with Schumer repeating that his caucus won’t support a bill that cuts taxes for the wealthy and adds to the deficit.
How low could tax rates really go? TPC ran three experiments to find out. The results: Even if Congress eliminated nearly all corporate tax preferences, it could not bring the corporate rate below 26 percent without losing revenue. Similarly, even if it wiped out all individual tax preferences, it could not bring the top rate much below 30 percent. And the chances of Congress repealing all those popular tax breaks are slim to none. As TPC’s Howard Gleckman explains, while the White House and GOP lawmakers want to cut rates steeply, they can’t go as low as they’d like without adding trillions to the deficit.
So will a tax bill raise the deficit? After years of insisting that tax reform would not add to the deficit, House Speaker Paul Ryan is now changing his tune. More important than revenue neutrality, Ryan says, is “pro-growth tax reform that will get the economy growing, that will get people back to work, that will give middle-class taxpayers a tax cut, and that will put American businesses on a better competitive playing field.”
Will it allow immediate expensing? Texas Senator Ted Cruz hopes so. At a Tax Foundation event yesterday he endorsed full and immediate deductions for capital investment by businesses. Perhaps not coincidently, he also backed a longer budget window.
Will it matter to the GOP base? A Politico/Harvard T.H. Chan School of Public Health poll finds that 53 percent of Republicans believe repealing and replacing the Affordable Care Act is an "extremely important priority," while only 34 percent say cutting individual and business taxes is such a high priority. Among all respondents, only 20 percent said tax cuts are extremely important.
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