GOP tax bill passes in House

Se­nate panel ap­proves own leg­is­la­tion with re­peal of ACA man­date ahead of full vote

The Mercury News Weekend - - FRONT PAGE - By Mike De­Bo­nis and Damian Paletta

“I think most peo­ple know how im­por­tant it is to cut taxes and get the econ­omy mov­ing again, and this bill does that.” – House Ma­jor­ity Whip Steve Scalise, R-La. “I didn’t come to Washington to raise taxes onmy con­stituents and I do not plan to start to­day.” – Rep. Dar­rell Issa, R-Vista

The House passed its ver­sion of the Repub­li­can tax over­haul Thurs­day, notch­ing a key win for Pres­i­dent Don­ald Trump and House Speaker Paul Ryan, R-Wis. But ob­sta­cles re­main in the Se­nate, which is re­fin­ing its own ver­sion of the leg­is­la­tion amid ob­jec­tions from key GOP sen­a­tors.

The bill passed the House 227205. Thir­teen Repub­li­cans voted against the bill. No Democrats voted for it.

The Repub­li­can- led Se­nate Fi­nance Com­mit­tee voted 1412 along party lines to ap­prove their tax over­haul bill and send it to the full Se­nate for an­tic­i­pated pas­sage the week af­ter next. The Se­nate ver­sion con­tains a re­peal of the Af­ford­able Care Act’s man­date that ev­ery­one in the United State have health in­sur­ance.

Three California Repub­li­can mem­bers of Congress— Rep. Dana Rohrabacher, R-Costa Mesa, Rep. Dar­rell Issa, R-Vista, and Rep. Tom McClin­tock, R-Elk Grove — broke

ranks on Thurs­day to vote against the Repub­li­can tax re­form bill that passed the House of Rep­re­sen­ta­tives.

They were among the 13 Repub­li­cans to vote against it, most fro­mother high-tax states such as New York and New Jersey.

The rest of California’s con­gres­sional del­e­ga­tion voted along party lines, with Democrats op­pos­ing the bill and the 11 other Repub­li­cans sup­port­ing it.

Those op­pos­ing the bill cited the elim­i­na­tion of a de­duc­tion that al­lowed tax­pay­ers to write off state and lo­cal in­come tax they paid each year, as well as a cap on a prop­erty tax de­duc­tion.

Get­ting rid of the in­come tax de­duc­tion would es­pe­cially hit Cal­i­for­ni­ans, who pay rel­a­tively high state taxes, they said.

More than 6 mil­lion Cal­i­for­ni­ans take ad­van­tage of the state and lo­cal tax de­duc­tions each year, de­duct­ing an av­er­age of $18,438 per fam­ily, ac­cord­ing to the non­par­ti­san Tax Pol­icy Cen­ter. And more than a third of the house­holds in Rohrabacher, Issa and McClin­tock’s dis­tricts took the de­duc­tions in 2015, IRS data shows.

“I didn’t come to Washington to raise taxes on my con­stituents and I do not plan to start to­day,” Issa said in a state­ment. “It’s dis­ap­point­ing that the bill ap­proved to­day will not pro­vide the same tax re­lief to Cal­i­for­ni­ans as it does to the rest of the na­tion.”

The California Repub­li­cans back­ing the tax plan ar­gued that as a whole it would re­duce tax rates for in­di­vid­u­als and busi­nesses, spurring eco­nomic growth.

“Pas­sage of the House bill is the first step to­ward sig­nif­i­cantly low­er­ing the tax bur­den in the Cen­tral Val­ley,” Rep. Jeff Den­ham, RTur­lock, said in a state­ment. “I look for­ward to work­ing with the Se­nate to send a fi­nal bill to the pres­i­dent’s desk that will ben­e­fit val­ley fam­i­lies, cre­ate jobs and put more money in peo­ple’s pock­ets.”

Issa and Rohrabacher, whose dis­tricts voted for Demo­crat Hil­lary Clin­ton in 2016, are seen as two of the most vul­ner­a­ble in­cum­bent mem­bers of Congress in the coun­try in 2018. McClin­tock is in a fairly safe Repub­li­can district, but he was out­raised by a Demo­cratic chal­lenger in the lat­est fundrais­ing re­ports.

Trump and Repub­li­can lead­ers in Congress are aim­ing to pass a bill that would cut taxes by as much as $1.5 tril­lion by the end of the year.

Trump vis­ited the Capi­tol shortly be­fore the early- af­ter­noon vote, speak­ing to Repub­li­can law­mak­ers be­hind closed doors to urge them to sup­port the cor­ner­stone of his eco­nomic agenda.

Trump’s part­ing words to Repub­li­cans, ac­cord­ing to a per­son in the room who was not au­tho­rized to com­ment pub­licly: “I love you. Now go vote.”

Even be­fore the vote, GOP lead­ers were con­fi­dent that the pep talk wasn’t nec­es­sary. Fewer than a dozen of the 240 House Repub­li­cans said they were op­pos­ing the bill or had lodged strong ob­jec­tions, as of Wed­nes­day morn­ing. The GOP could have lost up to 22 votes and still passed the bill Thurs- day.

“There’s not a lot of minds to change in there,” said Rep. Tom Cole, R-Okla.

Cole said that Trump’s re­marks were up­beat and packed with one-lin­ers and that the pres­i­dent did not in­clude the type of threats he de­liv­ered when he vis­ited law­mak­ers ahead of a cru­cial health care vote.

Repub­li­can angst in the House — over the prospect of rais­ing deficits by $1.5 tril­lion and de­liv­er­ing more ben­e­fits to cor­po­ra­tions than peo­ple — is mir­rored in the Se­nate, where the mar­gin for suc­cess is ra­zor thin and prospects for pas­sage re­main shaky. Sev­eral House mem­bers said they voted re- luc­tantly for their cham­ber’s bill Thurs­day.

Like the House bill, the Se­nate ver­sion makes cor­po­rate tax cuts in the­mea­sure per­ma­nent, but phases out in­di­vid­ual tax cuts by 2026, cre­at­ing a po­lit­i­cal predica­ment for many law­mak­ers.

More omi­nously, the Se­nate ver­sion in­cludes a re­peal of the Af­ford­able Care Act’s in­di­vid­ual man­date, a risky propo­si­tion for a cham­ber that in July failed to re­peal the leg­is­la­tion when three Repub­li­cans voted against do­ing so. The GOP con­trols 52 Se­nate seats, and if the 46 Democrats and two in­de­pen­dents con­tinue to op­pose re­peal, as ex­pected, the tax bill faces a rough time.

On Wed­nes­day, House Ma­jor­ity Whip Steve Scalise, R-La., said the vote count was “look­ing real good” af­ter weeks of work­ing with in­di­vid­ual mem­bers to ex­plain the plan and ad­dress ob­jec­tions that ranged from the parochial to the fun­da­men­tal.

“I think most peo­ple know how im­por­tant it is to cut taxes and get the econ­omy mov­ing again, and this bill does that,” he said.

Ex­pect this vote to be a key cam­paign is­sue in 2018. In ad­di­tion to the state and lo­cal tax de­duc­tions, the bill will also elim­i­nate pop­u­lar de­duc­tions for stu­dent loans, med­i­cal ex­penses and ed­u­ca­tor ex­penses, and it low­ers the cap on mort­gage de­duc­tions.

“What a bril­liant Repub­li­can strat­egy to lose the House in 2018,” said Kait Sweeney, a spokesper­son for the Pro­gres­sive Change Cam­paign Com­mit­tee, a lib­eral group. “Repub­li­cans are delu­sional if they think this vote won’t haunt them.”

The House bill de­liv­ers more than 80 per­cent of its over­all cuts to cor­po­ra­tions, busi­ness own­ers and wealthy fam­i­lies who are sub­ject to the fed­eral es­tate tax, ac­cord­ing to es­ti­mates re­leased by the Joint Com­mit­tee on Tax­a­tion, Congress’s non­par­ti­san tax an­a­lyst. But most mid­dle-class Amer­i­cans would see an im­me­di­ate tax cut be­cause of a low­er­ing of in­di­vid­ual tax rates, the near- dou­bling of the stan­dard de­duc­tion and a larger child tax credit.

But many house­holds that item­ize their de­duc­tions— tak­ing ad­van­tage of write- offs for state in­come taxes, med­i­cal ex­penses, and more — could see im­me­di­ate tax in­creases. In fu­ture years, the ben­e­fits of the bill for in­di­vid­u­als wane be­cause of the phase­out of a key tax credit and the use of a slower mea­sure of in­fla­tion to re­cal­i­brate bracket lev­els.

ALEX WONG — GETTY IM­AGES

Rep. Kevin Brady, R-Texas, is greeted by ap­plause from Rep. Paul Ryan dur­ing an event Thurs­day at the Capi­tol to cel­e­brate the pass­ing of the tax re­form bill.

JAC­QUE­LYN MARTIN — AS­SO­CI­ATED PRESS

Pres­i­dent Don­ald Trump, left, and Paul Ryan at­tended a pep rally with House Repub­li­cans on Thurs­day.

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