5 things to know about GOP tax plan
Senate Republicans need 50 votes to pass the first sweeping overhaul of the tax code since 1986. GOP leaders offered incentives to get recalcitrant members in line:
Deficit triggers
The Senate Budget Committee vot- ed Tuesday to send the tax bill to the floor after Sen. Bob Corker, R-Tenn., said he had an agreement to rescind some tax cuts or eliminate deductions if economic growth isn’t as robust as anticipated.
Corker has said he would oppose the tax bill if it added to the deficit. Trump administration officials said it wouldn’t, but Corker wanted triggers to kick in if they were wrong.
The U.S. Chamber of Commerce, an enthusiastic backer of the bill, called fiscal triggers unworkable Tuesday.
Health insurance
To lock up support from conservatives smarting from the Senate’s failure to repeal Obamacare, the tax bill approved by the Senate Finance Committee before Thanksgiving would repeal
the requirement that people buy health insurance or pay a fine to the Internal Revenue Service.
Some Republican senators balked at this back-door Obamacare repeal, including Maine’s Susan Collins. The Congressional Budget Office said the repeal would increase the number of people without insurance by 13 million by 2027 and raise premiums by 10% a year on people who remain in government-managed insurance exchanges.
Tuesday, Collins said President Trump and party leaders agreed to pass two insurance bills she supports to mitigate the impact of repealing the mandate.
One would reinstate subsidies paid to health insurance companies to hold down premiums for low-income customers. Trump canceled these payments this year. Another would create a reinsurance mechanism to help insurers deal with people with catastrophic medical costs.
Property taxes
Collins said she was optimistic the Senate would include in its final version of the bill a provision in the House bill that would allow taxpayers to deduct up to $10,000 in property taxes.
The Senate bill would repeal the entire deduction for state and local income, property and sales taxes, a change that could result in tax increases in high-tax states even after lowering rates and increasing the standard deductible significantly.
The $10,000 property tax deduction was crafted by House Republican leaders to win votes from members in some high tax states.
Arctic drilling
In voting to send the tax bill to the floor Tuesday, the budget committee tacked on a bill that would open part of the Arctic National Wildlife Refuge for oil drilling.
The two measures have nothing to do with each other but were paired in a budget resolution the Senate approved in October that invoked a complicated rule Republicans use to prevent Democrats from staging a filibuster, a procedure that would require 60 votes that the GOP does not have to overcome.
The political benefit of including ANWR is that the sponsor of the drilling bill is Sen. Lisa Murkowski, R-Alaska, another potential swing vote.
Pass-through companies
Large corporations are taxed under the corporate code, but the owners of many other businesses large and small — including partnerships such as law firms or real estate companies, as well as “mom and pop” retailers and sole proprietors — pay their taxes on their personal tax returns.
The deep cut proposed in the top corporate tax rate from 35% to 20% led Sen. Ron Johnson, R-Wis., to oppose the tax bill. Johnson argued that some so-called pass-through business owners would be at a disadvantage compared with large corporations if their personal tax bracket was higher than 20%. Johnson debated the issue with the president at a Capitol Hill luncheon Tuesday. He then voted for the tax bill in the budget committee.
Trump tweeted Monday that this was one area where the bill could be changed.