USA Today: Tax reform: Senate version of bill will delay corporate tax cuts one year
A Senate plan to overhaul taxes being released Thursday will delay for one year a cut in the top corporate tax rate from 35% to 20%, one of President Trump's top priorities, according to a Senate staff member who was familiar with the bill but not authorized to discuss it publicly.
The House Ways and Means Committee was working Thursday to release its tax changes, which would immediately drop the corporate rate. But lawmakers are struggling to keep the total cost of tax cuts under a $1.5 trillion limit they set in a budget resolution adopted earlier this year.
The House would bill collapse the number of brackets from seven to four, with individual income tax rates ranging from 12% to 39.6%. It would eliminate the personal exemptions, currently worth about $4,000 each for taxpayers, spouses and children. Instead, it would increase the standard deduction to $24,000 for married couples, increase the child tax credit from $1,000 to $1,600, and create a new credit for taxpayers, spouses and adult dependents of $300 each.
The House bill provides for corporate rates to drop starting at the beginning of 2017, but the Senate would delay that until 2018, which would reduce the total cost of the bill by more than $100 billion.
Ahead of the Senate bill's release, Sen. Rob Portman, R-Ohio, said on Bloomberg TV that the Senate made changes to what the House unveiled last week "as we have gotten input" to ensure that the middle class and small businesses got tax relief.
The National Federation of Independent Business, a leading lobbying group for small businesses, had objected to the way the House bill had structured a new top 25% tax rate because it included provisions designed to prevent wealthy investors from having their incomes qualify as business income to avoid the top individual tax rate of 39.6%.
The Finance Committee will begin debating the bill on Monday, and the House is supposed to take up its version on the floor next week as well.
Democrats on the Ways and Means Committee, which met every day this week before releasing a revised bill on Thursday afternoon, sounded exasperated about the process. All week, they proposed changes to save tax provisions they said were popular but would be defeated, and were voted down even as some Republicans said during debate they agreed on the need for the provisions.
"Every single Democratic amendment has been rejected with absolutely circus-like contortions by our Republican colleagues," said Rep. Lloyd Doggett, D-Texas.
Senate Minority Leader Chuck Schumer, D-N.Y., said Republicans were working to speed action on the bill because they "know that the longer their bill is out there for the public to see, the less they'll like it. Their only hopes of passing it are to rush it through."
The speed of congressional action on the tax changes took a toll this week on some of the think tanks that focus on policy.
On Thursday, the Tax Foundation, a group whose analysis has been cited by numerous Republican supporters of the bill, including House Speaker Paul Ryan, revised its analysis of economic growth that the House bill would generate downward, from 3.9% to 3.6% growth in the gross domestic product over the coming decade.
That change came after the Tax Policy Center, a group whose analysis of winners and losers in the plan has been cited by numerous Democrats, issued a report on Monday and then withdrew it hours later it because of an error. It released a revised accounting on Wednesday.