Budget & Taxes

Half End Up Paying More In Taxes

“Republicans are losing the public relations battle on their tax-cut bills. While a tax bill cleared the House last week, several Senate Republicans appear skeptical of their chamber’s version. And polls show that Americans are much more opposed to the GOP’s tax effort than supportive — a fact that has to be weighing on those same wavering Senate Republicans,” the Washington Post reports.

A new report from the bipartisan Tax Policy Center should make it even more difficult for senators to get to yes:

On average in 2027, taxes would rise modestly for the lowest-income group, change little for middle-income groups, and decrease for higher-income groups. Compared to current law, 9 percent of taxpayers would pay more in 2019, 12 percent in 2025, and 50 percent in 2027.

“It’s not difficult to see this winding up in just about every piece of Democratic pushback on the Senate GOP’s tax bill.”

Bloomberg: House tax bill is littered With loopholes for Wall Street’s wealthiest.

A Government Shutdown Is Very Possible This Christmas

Stan Collender: “Congressional staff, lobbyists and reporters all cheered when the current continuing resolution — the law that’s keeping the government’s lights on while Congress figures out what to do about the fiscal 2018 spending bills — was drafted so it would expire on December 9. They all figured the early-in-December deadline meant they could make relatively secure plans to be out-of-town for the holidays.”

“I sure hope they didn’t get nonrefundable tickets.”

“The GOP’s efforts to enact a tax bill by President Trump’s arbitrary and nonsensical Christmas 2018 deadline has made it almost certain that Congress will be in session until close to the end of December. That, in turn, virtually guarantees that the (hopefully) final funding decisions for the year also won’t be made until the end of the month. That will wreak havoc with holiday schedules. It could also mean there could be a federal government shutdown by January 1.”

Immigration Showdown Set for December

Politico: “Concern is growing in both parties that a clash over the fate of Dreamers will trigger a government shutdown this December. House conservatives have warned Speaker Paul Ryan against lumping a fix for undocumented immigrants who came to the country as minors into a year-end spending deal. They want him to keep the two issues separate and delay immigration negotiations into 2018 to increase their leverage — which both Ryan and the White House consider reasonable.”

“But many liberal Democrats have already vowed to withhold votes from the spending bill should it not address Dreamers, putting Democratic leaders Nancy Pelosi and Chuck Schumer in an awkward spot if they don’t go along.”

Republicans Are Blowing Their Chance at Tax Reform

David Frum: “As I write on November 19, it may see like the GOP tax plans are carrying all before them. A big tax cut has passed the House. A somewhat different plan passed late Thursday night through the Senate Finance Committee. The president is bellowing on Twitter his readiness to sign almost any work product that arrives at his desk.”

“But what is heading toward him is not the kind of reform that can command broad political support, and thus stand the test of possible electoral defeat in 2018 and 2020. It’s a scandalous expression of upper-class and Sunbelt chauvinism that will melt away within weeks of the next Democratic electoral success. Even if it becomes law, as still seems improbable in the face of the plan’s terrible poll numbers, what firm would venture a long-term investment based on tax changes so likely unsustainable?”

Trump Says Flake Won’t Vote for Tax Bill

President Trump and Sen. Jeff Flake (R-AZ) are sparring again, Roll Call reports, with Trump tweeting:

Sen. Jeff Flake(y), who is unelectable in the Great State of Arizona (quit race, anemic polls) was caught (purposely) on “mike” saying bad things about your favorite President. He’ll be a NO on tax cuts because his political career anyway is “toast.”

“The tweet raised eyebrows in Washington, with congressional observers and reporters firing off their own tweets noting Flake had not previously announced how he intends to vote on a tax overhaul bill that cleared the Finance Committee late Thursday evening.”

Democrats See Backlash Over Tax Bill as Key to Midterms

Washington Post: “Coming off Election Day wins from Seattle to Long Island, Democrats are starting to see the shape of a new majority, built on a potential suburban backlash to changes in the tax code.”

“Republicans have accused the minority party of demagoguery and bad math. In New Hampshire, Republican Gov. Chris Sununu has praised the tax plan for doubling the standard deduction and adding a property-tax exemption. Democrats have falsely claimed that the bill would raise taxes on ‘most working-class families’ — only 6.5 percent of lower-income households will take a direct hit, though many taxpayers making less than $100,000 would get little.”

“Yet Democratic wins, and polling about the tax bill, has led the party to think that it can cleave millions of voters from the GOP.”

Tax Reform Without the Reform

Jonathan Chait: “The tax break for private planes is the sort of provision that is usually held up as a case for what tax reform is needed to eliminate. In this case, it is being created by tax reform. That is one clue that the ‘tax reform’ plan being drawn up in Congress is nothing of the sort.”

“The goal of a tax-reform plan, as the term has been historically understood, has been to minimize political interference in the tax code. The tax code might charge a rich person a higher rate than a poor person, but it doesn’t want to charge a butcher who earns $50,000 more than a baker who earns $50,000 just because the baker did a better job lobbying Congress.”

The GOP Tax Bill Is an Economic Policy Disaster

Stan Collender: “If it’s enacted, the GOP tax cut now working its way through Congress will be the start of a decades-long economic policy disaster unlike any other that has occurred in American history.”

“There’s no economic justification whatsoever for a tax cut at this time. U.S. GDP is growing, unemployment is close to 4 percent (below what is commonly considered ‘full employment’), corporate profits are at record levels and stock markets are soaring. It makes no sense to add any federal government-induced stimulus to all this private sector-caused economic activity, let alone a tax cut as big as this one.”

“This is actually the ideal time for Washington to be doing the opposite.”

The Shocking Math of the GOP Tax Plan

Adam Davidson: “If it gives us nothing else positive, the Republican tax plan—and, in its Senate form, the health-care repeal—at least provides clarity. There is no debate. The middle class will, in the long run, pay more in taxes than under current law, and the rich will pay less.”

“Just ask the very people who wrote it. The U.S. Congress Joint Committee on Taxation is run by the chairs of the House Ways and Means Committee and the Senate Finance Committee—Representative Kevin Brady and Senator Orrin Hatch, respectively. The Joint Committee’s reports of this week make startling reading, or as startling as a series of spreadsheets of tax revenue data can be. The report shows that this bill is much like a teaser rate on a new credit card: there are some goodies in the first couple of years, but those disappear fairly quickly, at least for those below the median income.”

“The report shows that the rich benefit and the poor are hurt in every way that it measures.”

Roadblocks Emerge in Senate for Tax Bill

“GOP leadership is confronting mushrooming demands from individual senators with much more power to bollix up the tax plans, thanks to the party’s super-thin majority,” Politico reports.

“Sen. Ron Johnson (R-WI) has already said he won’t vote for his colleagues’ proposal because of how it treats small businesses… Deficit hawks like Sens. Bob Corker (R-TN) and Jeff Flake (R-AZ) are worried the plan will cost far more than advertised thanks to its liberal use of “temporary” tax provisions that will likely be eventually extended.”

“Moderate Susan Collins (R-ME) has her own concerns, including with plans to repeal the Affordable Care Act’s individual mandate to have health insurance as part of tax reform. Others like Sens. John McCain (R-AZ) and Lisa Murkowski (R-AK) have been wildcards, avoiding taking a public position on the proposal.”

Speed and Subterfuge Is Key to GOP Tax Strategy

John Cassidy: “It is entirely conceivable that, in two weeks’ time, the Republican Party’s leaders will have largely succeeded in railroading through Congress an unpopular, regressive, and damaging tax reform. That was their plan from the beginning, and so far it has worked out much as they intended. On Thursday, the House, spurred on by Paul Ryan, voted to approve its version of the legislation. Now everything depends on what happens in the Senate.”

“To get their tax plan through this final legislative stretch, the Republicans will try to rely on speed, subterfuge, and diversion. McConnell and Ryan have read the opinion polls. They know that there is widespread opposition to their plan’s major elements, such as its big tax cuts for corporations, unincorporated businesses, and rich people (like the President), or its new limits on popular deductions for mortgage interest and state and local taxes.”

“That explains why the Republicans didn’t hold any hearings in the House, and why they are adopting similar blitzkrieg tactics in the Senate. The G.O.P.’s strategy is to rush this thing through before the other side has time to organize a defense.”

Murkowski Tax Vote Contingent on Health Vote First

Sen. Lisa Murkowski (R-AK) “said that her vote on the current version of the tax overhaul is contingent on passing a separate bill to stabilize the individual health insurance market,” Roll Call reports.

“The tax legislation now includes a section to repeal the individual mandate — a provision that opens up over $300 billion in revenue — but could also threaten the viability of the overall health law.”

Quote of the Day

“I come from the poor people, and I have been here working my whole stinkin’ career for people who don’t have a chance, and I really resent anybody that says I’m doing it for the rich. Give me a break. I think you guys overplay all the time, and it gets old. And frankly, you ought to quit it.”

— Sen. Orrin Hatch (R-UT), quoted by RealClearPolitics, in an exchange with Sen. Sherrod Brown (D-OH).

GOP Tax Bill Gives Private Jet Owners a Tax Break

Yahoo News: “If you’re one of the lucky Americans who owns a private jet, don’t fret.  Republicans have your back—in the form of tax breaks.”

“The new Senate tax bill will give those who own or lease private planes breaks on the amount they pay to companies for maintenance, storage, fueling and even when they want to hire pilots and a crew onboard. “

Republicans Pass Tax Bill In the House

“The House passed its version of the Republican tax overhaul Thursday, notching a key win for President Trump and House Speaker Paul D. Ryan (R-WI). But obstacles remain in the Senate, which is refining its own version of the legislation amid objections from key GOP senators,” the Washington Post reports.

“The bill passed with 227 votes in favor and 205 against. 13 Republicans voted against the bill. No Democrats voted for it.”