GOP closer to tax cut for wealthy, companies

WASHINGTON • Senate Republicans locked down the votes Friday for a $1.5-trillion tax bill that bestows massive benefits on corporate America and the wealthy while delivering mixed blessings to everybody else.

The legislation was headed for passage later in the day on the Senate floor, after a few final rounds of dealmaking brought key wavering senators on board.

“We have the votes,” Majority Leader Mitch McConnell told reporters after emerging from a meeting with his caucus.

Almost simultaneously, Sen. Jeff Flake of Arizona, a prominent holdout, announced his support for the legislation. That followed earlier support from Sen. Ron Johnson of Wisconsin, and Sen. Susan Collins of Maine.

A single GOP holdout remained: Sen. Bob Corker of Tennessee, who had fought unsuccessfully to add a deficit-containment mechanism to the legislation. Late Friday afternoon, Corker announced he would be voting “no,” but by then it no longer mattered.

Fifty-one out of 52 Senate Republicans were in the “yes” column, setting up a major victory for McConnell and President Donald Trump on the legislation that has emerged as their No. 1 goal after their humiliating failure earlier in the year to repeal the Affordable Care Act.

The centrepiece of the GOP plan is a move to lower the corporate tax rate from 35 per cent to 20 per cent, starting in 2019. The Senate tax bill would also temporarily cut tax rates for families and individuals until 2025. But the bill would kill a number of tax benefits. It would subject fewer people to the estate tax but stop short of eliminating that tax altogether.

The most recent review of the bill by the Joint Committee on Taxation, Congress’s non-partisan tax analysts, found that only 44 per cent of taxpayers would see their burden reduced by more than $500 in 2019 but that high earners would fare much better than the poor under the bill.

The bill would also repeal the individual mandate from the Affordable Care Act, a major change that was added in recent weeks as part of a broader GOP effort to dismantle the Obama-era law. The individual mandate creates penalties for many Americans who don’t have health insurance, but the repeal would leave 13 million more people uninsured.

The tax package still must clear several hurdles before it can become law. Once the Senate passes the bill, GOP leaders must reconcile differences between the Senate bill and a version that passed the House several weeks ago. They are optimistic they can do this, but a number of issues must be resolved before they can send the bill to the president’s desk.

For Trump, a victory on the tax plan would stand as a signal triumph, in sharp contrast with the political troubles besetting the White House on other fronts.