Last week, President Donald Trump’s administration and the GOP in Congress released a framework for possible tax reform. The details are vague, noting that more will happen once tax reform switches to committees.
However, two GOP senators have already voiced doubt over the framework: Kentucky Republican Rand Paul and Tennessee Republican Bob Corker, who recently announced he will not seek reelection next year.
On Tuesday, Paul tweeted out his displeasure over the plan after he read the analysis from the Urban-Brookings Tax Policy Center (TPC).
The analysis from TPC shows “that by 2027, almost 30 percent of taxpayers with income between about $50,000 and $150,000 would see their taxes increase.” The center found that “about 25 percent of taxpayers would see higher taxes” by 2027.
House Ways and Means Committee Chairman Kevin Brady (R-TX) criticized the analysis, reminding the TPC that this is a framework and the finer details won’t come out until after the tax writing committees finish their jobs:
“This so-called study is misleading, unfounded, and biased. TPC makes a variety of overreaching and unrealistic assumptions about policy decisions Members of Congress still have to make as we draft pro-growth tax legislation,” House Ways and Means Committee Chairman Kevin Brady (R-Texas) said in a statement.
Corker criticized the part of the framework that will not allow people to deduct their state and local taxes. National Economic Council Director Gary Cohn, one of the authors of the framework, said this part remained negotiable.
But Corker is concerned about the “revenue” because Heaven forbid the government stop spending and people actually get to keep their hard earned money that they earned:
“That’s the easiest one,” said Corker, a Tennessee Republican. “Some of the others are actually more offensive and produce lesser amounts of money.”
Corker said he will not vote for any package that adds to the deficit. White House Budget Director Mitch Mulvaney countered Corker by saying that a higher deficit will add growth. From Bloomberg:
White House Budget Director Mick Mulvaney is signaling similar flexibility, saying on CNN Sunday that decisions about deductions remain up in the air as “the bill is not finished yet.” He took it a step further, by adding that a tax plan that doesn’t add to the deficit won’t spur growth.“I’ve been very candid about this. We need to have new deficits because of that. We need to have the growth,” Mulvaney said. “If we simply look at this as being deficit-neutral, you’re never going to get the type of tax reform and tax reductions that you need to get to sustain 3 percent economic growth.”
Is anyone else’s head spinning?
Remember, the GOP only holds a two seat majority in the Senate. If it comes down to a 50-50 vote then Vice President Mike Pence needs to cast the tie-breaking vote. That may not have to happen as we have seen with the attempts to “repeal” Obamacare. Sen. Susan Collins (R-ME) is a moderate and Sen. John McCain (R-AZ) has no problem going against his party.
Corker once said that tax reform will be easier than Obamacare repeal. It looks like the senator may have to dine on his words.
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