McConnell Says Republicans Have the Votes to Pass the Tax Bill

Right Now Senator Susan Collins said she will vote yes on the tax bill. Senator Bob Corker says he cannot support current bill.

• Senator Mitch McConnell, the majority leader, said “we have the votes” and the Senate will begin voting later today.

• Senator Susan Collins of Maine said she has secured the changes she needs to vote yes. For example, the bill will now include a $10,000 deduction for state and local property taxes.

• Three previous Republican holdouts — Senators Jeff Flake of Arizona, Steve Daines of Montana and Ron Johnson of Wisconsin — threw their support behind the bill.

• An effort by Senator Bob Corker of Tennessee to include future tax increases to offset the deficit impact of the bill was rejected by Senate.
 leadership, prompting Mr. Corker to say he is unable to support the legislation.
 • Lawmakers are now considering reinstating a modified version of the alternative minimum tax on individuals and on corporations.

Republicans close to passing Senate bill.

The Senate is on the verge of passing the Republicans’ sweeping tax overhaul with several holdouts now throwing their support behind the bill.

Ms. Collins, who was the last big holdout, said she would support the bill after changes she wanted were made to the legislation.

“Having secured these key improvements in the bill, as well as the commitments to legislation to help lower health insurance premiums, I will cast my vote in support of the Senate tax reform bill,” she said. “As revised, this bill will provide much-needed tax relief and simplification for lower- and middle-income families, while spurring the creation of good jobs and greater economic growth.”

Party leaders also picked up the votes of three other holdouts: Mr. Flake, Mr. Daines and Mr. Johnson.

Mr. McConnell and Senator John Cornyn, the No. 2 Senate Republican, said on Friday morning that Republicans had the 50 votes they need to pass the tax bill.

Republicans appeared increasingly confident as they milled into the Senate’s ornate Strom Thurmond Room to hash out the remaining details of a tax bill that has been a moving target.

Among the changes Ms. Collins secured was adding in a $10,000 property tax deduction into the Senate bill. Ms. Collins tweeted that she was “delighted” with the move.

Mr. Corker had pushed to scale back the tax cuts in the Senate bill in the wake of a report from the congressional Joint Committee on Taxation that projected the bill would add $1 trillion to deficits over the course of a decade, even after accounting for economic growth. On Thursday night, Republicans were discussing several possibilities for changing the bill to address deficit concerns, including gradually raising the corporate tax rate in later years.

But other Republicans resisted the idea of raising taxes, and on Friday, that idea was off the table.

“This is yet another tough vote. I am disappointed. I wanted to get to yes. But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations,” Mr. Corker said in a statement.

Mr. Trump sounded optimistic on Friday morning, in a tweet taunting Democrats over the bill’s prospects.

Party leaders gained four more votes on Friday.

Mr. Daines and Mr. Johnson had objected to the bill because of how it treated pass-through businesses, whose profits are distributed to owners and taxed at individual rates.

The Senate tax bill will now allow pass through owners to deduct 23 percent of their business income as a way of lowering their taxes, up from 17.4 percent in the original Senate bill.

“After weeks of fighting for Main Street businesses including Montana’s farmers and ranchers, I’ve decided to support the Senate tax cut bill, which provides significant tax relief for Main Street businesses,” Mr. Daines said in a statement on Friday morning.

Mr. Johnson said in a statement he also supports the bill.

Mr. Flake, in a statement, said he would support the tax bill after getting changes to a budget “gimmick” and a commitment that Senate leaders and the Trump administration would work with him on a legislative solution on Deferred Action for Childhood Arrivals.

Republicans are coming up with ways to pay for the changes.

On Friday, Republicans rejected the idea of putting in place tax increases that would take effect some years from now, a step that would soften the deficit effects of the legislation.

“Larding the bill up with new tax increases would have been going the wrong direction,” said Senator Ted Cruz, Republican of Texas.

But lawmakers still need to find ways to pay for the changes being made and congressional aides said it will likely be a combination of things including:

• Retaining the alternative minimum tax for corporations, which would raise $40 billion over a decade.

• Retaining a modified version of the individual AMT, which would raise $133 billion over a decade.

• Slightly increasing the tax rate on offshore assets under the “deemed repatriation” provision, which would raise $97 billion over a decade.

Who Gains From the Tax Plan? Economists Face Off

Republican leaders say their proposals will fuel investment and job creation. Critics say that the rich are the beneficiaries and that debt will weigh on growth. We asked two economists, one from each side, to make their cases.

This bill has been promoted as a boon for the middle class. Does it fulfill that promise?

Douglas Holtz-Eakin:

Capital accumulation, productivity growth and living better: That is the case for tax reform. It would be an easier political sale if there were a straight line from the policy to the prosperity (which is why the left prefers programs that write checks). But the logic is sound, the evidence conclusive and the case for tax reform helping the middle class impeccable.

Kimberly A. Clausing:

This tax bill is not about workers. It is about giving shareholders and businesses lower taxes and merely hoping benefits will trickle down. Instead, give workers any tax cuts, and rely on the strength of the middle class to bubble up, strengthening American business. Sound tax reform should not lose revenue, and it should not give the vast majority of benefits to those at the top.

Read the full story »

Another study says tax bill won’t pay for itself.

The independent Tax Policy Center said on Friday that the Senate tax bill would add $1.2 trillion to federal deficits over 10 years, even after accounting for increased economic growth. That deficit estimate was slightly higher than the congressional Joint Committee on Taxation projected on Thursday.

The so-called dynamic score from the center found that the bill, as approved in the Finance Committee, would increase economic growth by 0.7 percent next year, but that its growth boost would fade over a decade, as deficits and federal debt increase. The center said those benefits would be larger if the economy was struggling, and not operating under low unemployment: “Because the economy is currently near full employment, the impact of increased demand on output would be smaller and diminish more quickly than it would if the economy were in recession.”

Republican senators have criticized the center’s previous findings and largely dismissed the Joint Committee’s analysis on Thursday. They say they expect much larger growth effects than the analyses have found.

The independent Tax Foundation, which typically finds higher growth effects from tax cuts, has not yet released an analysis of the bill after it underwent significant amendments in committee.