Se­nate would de­lay cor­po­rate tax cuts

Chicago Sun-Times - - NATION - Herb Jack­son USA TO­DAY Con­tribut­ing: El­iza Collins and Deirdre Sh­es­green.

Se­nate Repub­li­cans un­veiled a tax plan Thurs­day that would de­lay a deep cut to the top cor­po­rate rate by one year but keep some de­duc­tions and cred­its that had been on the chop­ping block, lower the top tax bracket, and con­tinue a mod­i­fied es­tate tax.

“It will re­duce in­di­vid­ual tax rates across the board and di­rect sub­stan­tial re­lief to low- and mid­dle- in­come fam­i­lies and work­ers,” Sen. Or­rin Hatch, Fi­nance Com­mit­tee chair­man, said “It will bring down cor­po­rate tax rates, a goal long shared by Repub­li­cans and Democrats, and pro­vide businesses with new op­por­tu­ni­ties for growth and ex­pan­sion.”

The top cor­po­rate rate would drop from 35% to 20% in 2019, a year later than it would in a re­vised bill ap­proved by the House Ways and Means Com­mit­tee. That change de­lays one of Pres­i­dent Trump’s pri­or­i­ties for over­haul­ing the tax code, but ad­min­is­tra­tion of­fi­cials did not seem con­cerned.

“It’s a great day in mov­ing in the right di­rec­tion for mid­dle- in­come tax cuts,” Trea­sury Sec­re­tary Steve Mnuchin said.

Still, the cor­po­rate de­lay will be one of many stick­ing points as the House and Se­nate try to com­pro­mise.

“As a means of cre­at­ing eco­nomic growth, we’re in fa­vor of be­gin­ning the tax cuts im­me­di­ately. ... The pres­i­dent sup­ports this po­si­tion as well,” said Mark Mead­ows, chair­man of the House Free­dom Cau­cus.

Mead­ows said if the Se­nate was look­ing for ways to cover the cost of restor­ing other tax de­duc­tions, it would be bet­ter to re­peal the man­date in the 2010 Af­ford­able Care Act that re­quires peo­ple to have health in­sur­ance. The Con­gres­sional Bud­get Of­fice said Wed­nes­day that change would re­duce deficits by $ 338 bil­lion over the com­ing decade, but also lead to 13 mil­lion fewer peo­ple with in­sur­ance in 2027 and higher rates for those who re­main in gov­ern­ment- man­aged ex­changes.

That pro­vi­sion was not in the Se­nate plan, nor was it added Thurs­day af­ter­noon by Ways and Means Chair­man Kevin Brady, R- Texas, in a re­vised bill he un­veiled shortly be­fore the panel voted along party lines to ap­prove it.

Sen. Bob Corker of Ten­nessee said sen­a­tors are dis­cussing whether to add lan­guage re­peal­ing the Oba­macare man­date.

Ear­lier Thurs­day, House Speaker Paul Ryan, R- Wis., said he would fa­vor the move.

“I want to get of the in­di­vid­ual man­date any way I can be­cause I think the in­di­vid­ual man­date is do­ing great dam­age to peo­ple in this coun­try,” he said.

Brady’s re­vised bill did make two changes: It re­stored the adop­tion tax credit and al­lowed mil­i­tary fam­i­lies to deduct mov­ing ex­penses.

Even with the de­lay in cor­po­rate cuts, the Se­nate plan will boost the na­tional debt by $ 1.5 tril­lion over the next decade if no benefits for eco­nomic growth are in­cluded, Fi­nance Com­mit­tee aides said.

And that could be prob­lem for deficit hawks in the Se­nate, who were look­ing to elim­i­nate cred­its and de­duc­tions to bal­ance the rev­enue losses of lower tax rates.

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