The House will vote today on $1.5 trillion in tax cuts and a broad overhaul of the corporate tax system after Senate leaders appeared to clear their final hurdles to passage.
“This is the week we deliver on our promise for a fairer, flatter, simpler tax code,” House Ways and Means Committee Chair Kevin Brady, R-Texas, told reporters December 18.
Speaking on the Senate floor, Sen. Susan M. Collins, R-Maine, later said she would support the comprehensive tax reform bill, all but ensuring its passage. Other holdouts such as Sen. Marco Rubio, R-Fla., and Sen. Ron Johnson, R-Wis., have already signaled support for the legislation after compromising on priorities including, respectively, an increase in child tax credit refundability and additional relief for passthrough businesses. Sen. John McCain, R-Ariz., will not be in Washington to vote, according to a release from his office, but all other Republican senators are expected to vote for the bill.
Congressional Republicans released the conference-reported H.R. 1 legislative text December 15, incorporating several changes from previous versions of the legislation to the tax treatment of passthrough businesses and to individual tax provisions.
Some Republican leaders suggested over the weekend not only that the Tax Cuts and Jobs Act would pay for itself with increased economic growth, but that all Americans would see their taxes reduced.
“This will benefit hard-working American families, people in the lower income tax brackets, and everybody in every tax bracket will see a tax cut,” Senate GOP Majority Whip John Cornyn of Texas said December 17 on ABC’s This Week. He said that economic growth would offset the bill’s $1.46 trillion price tag over 10 years.
Speaking on several Sunday morning programs, Treasury Secretary Steven Mnuchin noted the historic nature of the tax legislation and said by lowering corporate rates to 21 percent from 35 percent, U.S. businesses would increase wages and be more competitive globally. On CBS’s Face the Nation, Mnuchin said American workers will see lower taxes in February 2018 by changing their withholding, but that although corporations could begin paying higher wages next year, most payroll gains might take three to five years to filter down to workers.
The bill’s individual tax provisions expire at the end of 2025.
Rules Committee Clears Bill
The House Rules Committee was expected to approve a rule late December 18 allowing for one hour of House floor debate on the conference committee report on December 19, a committee aide said.
At a subsequent meeting planned for December 19, the Rules panel is expected to set debate for a short-term spending bill, including an amendment to provide disaster funding for taxpayers affected by recent hurricanes in Florida and Texas.
House Ways and Means Committee member Vern Buchanan, R-Fla., said the disaster funding would probably not be offset by revenue provisions.
The spending bill would keep the government operating through January 19.
Over the weekend, Sen. Bob Corker, R-Tenn., who recently said he would support the Tax Cuts and Jobs Act, wrote to Senate Finance Committee Chair Orrin G. Hatch, R-Utah, seeking information about how a particular passthrough provision was included in the final bill that would allow capital-intensive businesses including real estate developers to qualify more of their income for the 20 percent deduction.
Despite media reports that the provision appeared to benefit Corker financially and was added at the last minute, he suggested that the language was always in the legislation. “My understanding from talking to leadership staff today is that a version of this provision was always in the House bill — from the Ways and Means markup, through House floor consideration — and in reconciling the divergent House and Senate approaches to passthrough businesses this House approach stayed in the final conference version,” Corker wrote December 17.
Hatch responded in his own letter December 18, telling Corker he was “disgusted by press reports that have distorted one particular aspect of the conference agreement on H.R. 1.” Hatch explained that the passthrough language was based on the unified GOP tax reform framework, but that “the House Ways and Means Committee and the Senate Finance Committee achieved this mutual goal by different means.”
The alternative included in the conference report “was derived from the House provision and is the product of a negotiation between the House and Senate tax-writing committees. It is that simple,” Hatch wrote.
Brady told reporters he pushed during the conference committee negotiations to include the option for capital-intensive passthrough businesses to qualify more of their income for the deduction. “This was an important part of our passthrough structure, and we prevailed in adding it to the ultimate passthrough business deduction approach, and the Senate agreed," he said.
Brady explained that Republicans chose the option because they “want to encourage passthrough businesses that do a lot of capital investment for growth — energy, advanced manufacturing, telecom . . . they may be making major investment, but without tons of workers that accompany that. Those should be the type of capital investment we encourage and reward.”
Stephen K. Cooper contributed to this article.
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