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VOL. 41 | NO. 16 | Friday, April 21, 2017
Official estimate could upend Trump tax plan before release
WASHINGTON (AP) — A new congressional estimate could upend President Donald Trump's tax plan even before he releases it.
Trump is scheduled to unveil the broad outlines of a tax overhaul Wednesday that includes a massive cut in the corporate income tax, reducing the top rate from 35 percent to 15 percent.
The official scorekeeper for Congress said Tuesday that a big cut in corporate taxes — even if it is temporary — would add to long-term budget deficits. This is a problem for Republicans because it means they would need Democratic support in the Senate to pass a tax overhaul.
Democrats mused that Republican lawmakers who slammed the growing national debt under President Barack Obama are now being asked to embrace a tax plan that could add trillions of government red ink over the next decade.
Democrats say they smell hypocrisy.
"I'm particularly struck by how some of this seems to be turning on its head Republican economic theory," said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee.
Sen. Bob Casey, D-Pa., said, "On a lot of fronts, both the administration and Republicans have been contradictory, to say the least."
"There's no question we should try to reduce (the corporate tax rate), but I don't see how you pay for getting it down that low," Casey said. "Fifteen percent, that's a huge hole if you can't make the math work."
Last week, House Speaker Paul Ryan asked the nonpartisan Joint Committee on Taxation to analyze the budget effects of a temporary cut in the corporate tax rate, to 20 percent, that would expire after three years.
On Tuesday, the committee, which is the official scorekeeper for Congress, said the temporary rate cut would reduce tax revenues by nearly $500 billion in the first decade, and by a "non-negligible" amount in the years to follow.
This is important because the Senate cannot pass legislation that would add to long-term budget deficits without a 60-vote majority. That means Democrats would have to support it, and Republicans and Democrats have major differences when it comes to tax reform.
Republicans had been working under a budget maneuver that would allow them to pass a tax bill with a simple majority in the Senate — but only if it didn't add to long-term deficits.
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