With the continued funding of the government secured (at least for two weeks) attention on Capitol Hill must now turn back to the federal income tax, personal and corporate, and to the latest effort to re-wire the tax system as a whole.
One fact that is just now dawning on people is that there will be scant time for affected businesses and individuals to adjust to the new regime, whatever it turns out to be. Usually, changes in the tax law are telegraphed, and entities have months to adjust their practices and plans accordingly. This time most provisions go into effect on January 1, 2018, less than four weeks from now (and the shape of the final bill is still to an important degree unknown).
The Senate has named its conferees for discussions with their House counterpart on reconciling the two quite different bills passed thus far by their respective chambers. Its list includes Republicans Orrin Hatch (Utah), Mike Enzi (Wyoming), and Lisa Murkowski (Alaska). It also includes Democrats Ron Wyden (Oregon), Bernard Sanders (Vermont), and Maria Cantwell (Washington).
Among the conferees from the House of Representatives one finds Republicans Kevin Brady (Texas), Rob Bishop (Utah), and Don Young (Alaska) as well as Democrats Richard Neal (Mass.), Sander Levin (Mich.) and Kathy Castor (Fla.).
Right Wing View
One of the arguments underway on the right is whether the corporate tax rate ought to be 20%, or whether it might be allowed to inch somewhat higher than that (to 22%) through the work of the conferees.
Early in this administration, the White House expressed an ambition to scale back the corporate tax from 35% all the way down to 15%. Neither the House not the Senate bill is quite that ambitious in its cutting: both put the new corporate tax at 20%.
But since they both agree on 20%, you might ask: what is there to confer further about? Isn’t it a cinch that the reconciled bill will also stipulate a corporate tax at 20%? No. After all, there are wavering Republicans in both Houses who could use some sugar coating for the bill before they send it to the White House. Senator Marco Rubio (Fla.) specifically tried to get the plan revised to put the corporate tax at 22%, and proposed to use the revenue from that extra 2% to make the child tax credit more generous. The President killed that idea, describing the 20% rate as a “red line” he would not cross.
But more recently, POTUS has indicated that he could accept a corporate tax rate of 22% after all. The “red line” seems to have become a negotiable pink, a fact that has some conservative groups such as the National Taxpayers Union quite unhappy.
But the Speaker of the House, Paul Ryan, seemed quite chipper Friday afternoon, tweeting, “The tax reform train is moving forward. We are heading toward history, pro-growth tax reform by New Year’s Day 2018.”
Left Wing View
The left continues to fire a battery of cannons at the bill(s). We will mention just a few of them here.
Mother Jones magazine has recently estimated the “billions of dollars each of the 15 richest families in America will save” due to the GOP’s intention to cut the “death tax.” In response to its tweet linking to that article, one Mother Jones reader said (one assumes sarcastically), “Whewww … Was worried the plan might hurt them.”
Former Secretary of State Hillary Clinton is responding to the existing state of tax cut proposals with … ‘I told you so.’ Not precisely in those words, but close. She tweeted “Senate Republicans rushed to pass so-called tax reform – a giveaway to those who least need it.” In a follow up she added “During the campaign I warned that the Rs would come after social security, Medicare % Medicaid and now they are.”
The Daily Beast is combining one headline subject with another, running a piece contending that a provision in the House bill would prevent people in California from deducting the property damage they suffer as a consequence of the vicious wildfires there.
The satirical magazine The Onion has run the headline, “New GOP Tax Plan Requires Welfare Recipients to Apply for Each Individual Piece of Food.”
Finally (for our brief survey), Lydia DePillis, a reporter at CNNMoney, says the White House is “confused” about infrastructure policy, on one hand looking to states “to hike taxes for their own improvements,” and on the other hand supporting provisions in the tax bills that will punish states and localities that do exactly that.