The United States Senate has passed a tax cut package in a spending bill by the narrowest of margins. In a late night vote, the Republican Party passed the bill along mostly party lines: 51-49. Senator Bob Corker, R-Tenn., was the lone defector.
The bill’s passage was met with widespread condemnation by deficit hawks who claim that it would not shore up a nearly $1 trillion shortfall and progressive critics who call it “the GOP tax scam.” One major item of partisan contention is a steep decline in the corporate tax rate from 35 percent to 20 percent.
The Senate version of the “Tax Cut and Jobs Act” is indeed a mixed blessing of tax cuts, increase in exemptions, and the elimination of exemptions for individual federal taxpayers.
The $4,050 personal tax exemption and deductions for state and local income tax were eliminated, while standard deductions nearly doubled to $12,000 for individuals and $24,000 for couples. An allowance of $10,000 for local property tax deductions was included.
A report from the Joint Committee on Taxation assessed that over 60 percent of taxpayers will initially experience a cut of at least $100 in 2019, although the cut diminishes in subsequent years.
In addition, 38 percent of taxpayers are projected to see a negligible change or increase of $100 or more on their taxes in 2019. It should be pointed out that an estimated 45 percent of households pay no federal incomes taxes, according to the Tax Policy Center’s estimates.
President Trump hailed the Senate’s passage of the bill.
https://twitter.com/realDonaldTrump/status/936864840240398337
Trump has made the case that the tax bill will stimulate economic growth of at least 3 percent. The administration has also argued for simplifying the tax code so that a return would be about the size of a “large postcard.”
Treasury Secretary Steve Mnuchin discussed the tax reform effort on Wednesday.
“This is going to be the biggest tax cut and the largest tax reform in the history of our country,” he said.
House Minority Leader Nancy Pelosi, D-Calif., decried it as a “betrayal of the American middle class.”
In passing the #GOPTaxScam, @SenateGOP has sealed its betrayal of the American middle class. https://t.co/BzuMZJwGx8 pic.twitter.com/hkx5mV3qpl
— Nancy Pelosi (@SpeakerPelosi) December 2, 2017
“The GOP tax scam is a product of haste, carelessness and cruelty,” Pelosi wrote. “It was written on Republicans’ trickle-down delusions, not analysis or facts. It was written first and foremost for the wealthiest one percent, not middle class families trying to get ahead.”
Among the Democrats’ contentions is that they were not allowed to see the most recent version of the tax bill until just before it hit the Senate floor. They claim that it is stuffed full of last minute handouts to lobbyists, and includes handwritten notes scribbled on the bill.
The Senate version of the bill varies slightly with the House version. It will return to the House of Representatives for another vote, expected to be Monday night, and will set up another Christmastime fly-by-night vote in mid-December.
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