Jennifer Huynh - Senators Scramble to Advance Tax Bill That Increasingly Rewards Wealthy

Summary: The Republican tax bill hurtling through Congress is increasingly tilting the United States tax code to benefit wealthy Americans, as party leaders race to shore up wavering lawmakers who are requesting more help for high-earning business owners. On Monday, as Republican lawmakers returned to Washington determined to quickly pass their tax overhaul, senators were in feverish talks to resolve concerns that could bedevil the bill’s passage. With pressure increasing on Republicans to produce a legislative victory, lawmakers are contemplating changes that would exacerbate the tax bill’s divide between the rich and the middle class. Those include efforts to further reward certain high-income business owners who are already receiving a tax break in the Senate bill but who are at the center of a concerted push by conservative lawmakers and trade groups to sweeten those benefits. As Republican leaders pressed for a Senate floor vote this week, there appeared to be little momentum for amendments that would help low-income Americans, which some Republican and many Democratic senators had sought.

Analysis: The Congressional Budget Office said this week that the Senate bill, as written, would hurt workers earning less than $30,000 a year in short order, while delivering benefits to the highest earners throughout the next decade. Those estimates echo other analyses, like that by the Joint Committee on Taxation, which have found the biggest benefits of the bill increasingly flowing to the rich over time. By 2027, the budget office said, Americans earning $75,000 a year and below would, as a group, see their taxes increase, because individual tax cuts are set to expire at the end of 2025. At the heart of the debate is whether to more favorably treat small businesses and other so-called pass-through entities — businesses whose profits are distributed to their owners and taxed at rates for individuals. Seventy percent of pass-through income flows to the top 1 percent of American earners, according to research by Owen Zidar, an economist at the University of Chicago’s Booth School of Business. Two Republican senators, Ron Johnson of Wisconsin and Steve Daines of Montana, have said that they will vote against the plan if it does not do more to help the owners of those businesses, possibly by increasing the individual income tax deduction for such owners from the 17.4 percent rate currently in the Senate bill. Republicans, who control the Senate 52 to 48, can afford to lose only two of their members if they hope to pass the bill on party lines in the upper chamber. Mr. Johnson could stall the bill by himself on Tuesday, when it is scheduled for a vote in the Senate Budget Committee. Mr. Johnson sits on that committee, where Republicans have a single-vote majority. On Monday, he said he would vote “no” unless his concerns were addressed. “I need a fix beforehand,” Mr. Johnson said. Earlier in the day, Senator John Cornyn, Republican of Texas and the majority whip, said, “There’s no deal, but there’s been some discussions on how to address Senator Johnson and Senator Daines’s concerns.” He continued, “We’re trying to be responsive.” Adding to the uncertainty, Senator Bob Corker of Tennessee also said on Monday that he could be a “no” vote in the Budget Committee if his concerns about the bill’s effect on the deficit were not adequately addressed.

Source: https://www.nytimes.com/2017/11/27/us/politics/senate-tax-bills-potential-hurdle-republicans.html