Tax overhaul advances, Senate unveils own plan
WASHINGTON: House Republicans advanced their tax overhaul Thursday but the US Senate unveiled a competing version with key differences, signalling a potential clash within President Donald Trump’s party.
Republican lawmakers have seized on the need to reform and simplify the nation’s cumbersome tax code with legislation that slashes taxes for corporations and American families.
Trump, desperate for a major congressional achievement in his first year in office following the collapse of his health care reform effort, is pushing an ambitious timeline: a tax bill on his desk by year’s end.
The House plan is on track for a floor vote next week, senior Republican Kevin McCarthy said, after the measure passed the Ways and Means Committee along party lines.
The White House hailed the advancement as “an important step,” and expressed confidence that “with continued cooperation with Congress, we will achieve these priorities this year.”
Trump’s office also applauded the Senate for releasing its version, even as the new legislation shows the Republicans in the two chambers are at odds.
While the House bill permanently cuts the corporate tax rate from 35 percent to 20 percent, effective in 2018, the Senate version would delay that cut until the following year.
The House version also maintains the nation’s top tax bracket for the wealthiest individuals at 39.6 percent, while the Senate bill lowers the top tier to 38.5 percent.
Senate rules allow for the measure to add $1.5 trillion to the deficit over 10 years. But with the cuts expected to cost far more, tax-writers have scrambled to find other ways to boost revenue and cut spending to cover the costs.
Republicans insist dramatically lowering corporate tax rates would send the US economy soaring, and offering a repatriation tax holiday would bring a tidal wave of internationally held money flooding back into the country.
With internal tensions simmering over what should end up in the largest tax overhaul since Ronald Reagan’s 1980s presidency, House Speaker Paul Ryan insisted the details will be “ironed out” between the two competing plans.
“It takes time. But trust me, we are going to get this over the finish line,” Ryan told reporters.
Republicans will likely have to go it alone, as Democrats in both chambers have united in opposition.
Several Democrats have pointed to a preliminary study by the Tax Policy Center, which said that under the House bill, at least seven percent of taxpayers would pay higher taxes in 2018.