On Thursday, details of the final version of the tax bill that will likely pass both the House and the Senate emerged. Liberals have held out hope that, like this fall’s ACA repeal attempt, this right-wing bill would earn some defectors in the Senate. Most notably, many have been hoping that Sen. Susan Collins (Manie) will vote nay, joining Sen. Bob Corker (R-Tenn.) and one other senator to sink the bill. Judging by the emerging final details of the bill, GOP defections seem unlikely, despite rumbling coming from some members of the caucus.
The bill, which is slated to be officially introduced Friday, will amount to a giveaway to the country’s richest Americans at the expense of the most vulnerable. If passed, the $1.5 trillion tax cut will serve as the Republican Congress’s signature legislation, as well as a nod to the party’s donor class before the 2018 elections.
But once Senator-elect Doug Jones (D-Ala.) is seated, the makeup of the chamber will shift, so there is a feeling among GOP insiders that this is the last chance to get a piece of promised legislation to President Trump’s desk. And so, Republicans are rushing to put a version of their tax bill on the President’s desk as soon as possible.
For opponents of the bill, the reality shaping up around the compromised tax bill should be disconcerting. Republicans have had little trouble reconciling the House and Senate versions of the bill. This has freed them to focus on holding on to the votes of GOP members who have expressed reservations. This has meant offering a series of giveaways to some and twisting the arms of others, but it looks like this effort will lead to a big Republican victory.
It begins with the tax cut
When evaluating the chances of the bill passing, it is important to remember that a massive tax cut that addresses the corporate tax rate and the estate tax is a primary priority of many Republican donors. That’s exactly what this bill is offering. This tax bill will be a windfall for the nation’s wealthiest people and the corporations they run.
The corporate tax rate will be reduced from 35 to 21 percent. Wealthy Americans will also receive a personal tax break. The top earners in America will pay 37 percent instead of the previous 39.6 percent. Those who run their businesses as partnerships and pay taxes individually can expect a 20 percent break. The alternative minimum tax, which has always been meant to make sure that the wealthy don’t egregiously exploit tax loopholes, will be weakened in the new bill as well. While the estate tax will not be repealed as the House stipulated, the threshold will be doubled from roughly $5.5 million to $11 million.
And will almost end the ACA
The repeal of the Obamacare “individual mandate” also survived in the final version of the bill. The measure is a way for the GOP to sabotage the ACA while offering a vote of confidence to Freedom Caucus members who don’t think the cuts go far enough. Though repealing the mandate is a relatively popular measure in polling, it is viewed as catastrophic by healthcare experts. Removing the penalty will lead to premium increases and could sink the healthcare exchanges, which would delight the right wing of the GOP. But it could leave an estimated 4 million people without healthcare in 2019.
All thanks to personal giveaways
The unpopularity of the bill has required Republican leaders to dole out unusual benefits to members of their caucus, and moderate senators have been swayed by big giveaways. Sen. Lisa Murkowski (R-Alaska) got a provision included in the bill that would open the Arctic National Wildlife Refuge to energy exploration. Alaska Republicans have long sought to expand drilling in the state. This victory could help Murkowski shore up support among her base and give her a reputation as a job creator ahead of her re-election bid in 2018.
Sen. John McCain (R-Ariz.) has been intransigent recently, but McCain’s wife owns a liquor distributor, and a cut to liquor taxes happened to make it into the final version of the bill. The Intercept reported that several other senators have close ties to the beverage industry as well, and will personally profit from the legislation. Meanwhile, a provision to help domestic airlines fend off competition made it in as well, and Delta Airlines happens to have close lobbying ties to Sen Rob Portman (R-Ohio).
There are some victories
To further tempt moderates, a few of the most devastating items in earlier versions of the bill are reportedly being left out of the final version. Taxpayers will still be able to deduct high out-of-pocket medical expenses. Graduate students will not be expected to pay taxes on stipends as was previously stipulated —and which infuriated some on the left. The beloved tax break on student loan interest is slated to remain intact. Teachers will also be able to hang onto a modest spending deduction.
The bill also walks back some of the language that angered larger, higher tax states like California and New York, as well as homeowners and realtors. Currently, there are property tax deductions that can be applied to state and local taxes. The GOP was hoping to scrap them, but the party backed off of that approach. A compromise was reached and these deductions will now be capped at $10,000 instead of being scrapped altogether. This could be enough to ensure that House Republicans from New York and California get on board with the bill.
All these leaves the bill likely to make it through. Even if Collins joins Corker, Republicans can get this through before Jones is seated. In fact. Collins said as much.
“I see no need to wait for Doug Jones to become a senator. We vote all the time in lame-duck sessions with retired and defeated members casting votes.”
While Florida Senator Marco Rubio put up token resistance to the bill on Thursday, it seems unlikely that he is sincerely considering a no vote. So while those on the left hold out for another near miss like ACA repeal, the odds are that Republicans are able to pass this tax bill by the slimmest of margins before the new year.