It’s still a big corporate tax cut.
On Thursday, Senate Republican leaders released their tax proposal, exactly a week after House Republicans unveiled theirs.
The broad strokes of the Senate’s Tax Cuts and Jobs Act bear a strong resemblance to the House’s bill of the same name, the House “Better Way” blueprint, and President Trump’s campaign and White House proposals and outlines. It hews closely to the “Unified Framework” released by the House, Senate, and President in September, which was supposed to reflect policies on which the White House and both houses of Congress agreed — though it diverges from that Framework at points.
That said, Senate Finance Committee chair Orrin Hatch and Majority Leader Mitch McConnell made a number of significant changes that set their plan apart. They would retain seven individual tax brackets, instead of consolidating them into four as in the House plan. They would delay the corporate tax rate cut until 2019, saving billions in 2018. They would cut but not eliminate the estate tax. They cut taxes for “pass-through” businesses in a slightly different way. They include a lower top rate for individuals, and dramatically expand access to the child tax credit to help rich families.
All told, though, the plan is, like its House counterpart, a proposal to dramatically slash corporate tax rates, open up a big new loophole for wealthy individuals, and pay for the cuts by dramatically expanding the national debt and ending a number of tax deductions which could leave a substantial share of of middle- and upper-middle class people paying more.
It does little to expand the refundable child tax credit, and so does next to nothing for the roughly 44 percent of Americans who don’t pay federal income taxes. For everyone else, it’s a mixed bag.
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