Well, House Republicans Went Ahead With Their 'Tax Reform 2.0' Legislation Anyway
- Author: Joey Payne Sep 18, 2018,
Sep 18, 2018, 1:29
They would make good on President Trump's repeated calls on Congress to go beyond the $1.5 trillion package he signed a year ago and give Americans more breaks.
WASHINGTON-Republicans in the U.S. House of Representatives plan to unveil another round of tax cuts this week, hoping to draw a sharp contrast between themselves and Democrats ahead of the November 6 congressional elections.
There are 57 competitive House races in the midterm elections, according to the Cook Political Report, and about a third of those are in districts located in high-tax states where the SALT cap has been a hot-button issue, Bloomberg noted earlier this month.
With congressional elections looming, Republicans in the U.S. House of Representatives on Monday proposed more deficit-expanding tax cuts, an effort seen by some tax experts as unlikely to become law and geared chiefly toward winning votes.
Dubbed "Tax Reform 2.0", the House package is meant to augment President Donald Trump's 2017 tax overhaul, which added $1.5 trillion to the federal deficit by providing permanent tax cuts for USA corporations, but only temporary individual tax cuts that are set to expire after 2025. It also includes making permanent the $10,000 annual cap for state and local tax deductions, which is unpopular in high-tax states like New York, New Jersey, and California. Prospects for the measure, which Democrats unanimously oppose, are dim in the Senate - and it may not come to a vote by the full House before the November elections. The full House vote is likely to be held on October 1. Deficit hawks as well as Democratic lawmakers - who were unanimous in opposing the tax legislation past year - are asking how the Republicans intend to pay for the extended tax cuts.
In a statement on Monday, House Democratic leader Nancy Pelosi said: "With version 2.0 of the GOP tax scam for the rich, Republicans want to add even more to the deficit, and even more to the bank accounts of the wealthiest 1 percent". So far, the GOP members of Congress have been unwilling to be a check on the actions of the president.
The legislation would make permanent last year's tax breaks for individuals, preventing them from facing a tax increase in eight years, while boosting incentives for retirement savings and giving more lenient tax treatment to startups and small businesses. Starting in 2026, the cuts could cost the federal government about $165 billion annually in today's dollars, according to projections by the Tax Foundation, a conservative-leaning think tank. In addition, the Republican plan would allow the popular, tax-free 529 college savings accounts to also be used to pay for apprenticeship fees and home schooling expenses, as well as paying off student debt.
The tax-cut bill reduced corporate taxes from 35 to 21 percent, fueling business growth for companies of every size, which have in turn hired more workers.
President Donald Trump has reportedly woken up to the possibility of being ousted from office by angry Democrats, and thinks he can play the situation towards a big reelection in 2020. In July, 40 percent of registered voters in the Midwest approved of Trump's performance versus 38 percent in September, and his disapproval rating among Midwesterners jumped from 50 percent in July to 55 percent in September.