WASHINGTON (CN) — The Senate tax-writing committee launched debate Monday on a bill that revealed sharp partisan divisions and opposing claims about what the first major tax overhaul in 30 years will do.
Republican and Democratic senators on the Senate Finance Committee traded jabs with sometimes fiery statements for several hours Monday afternoon as Republicans insisted the bill will be a boon to the middle class.
Democrats call it a massive handout to corporations, written hastily in secret by Republicans who want to ram it through without adequate debate or hearings.
Sen. Orrin Hatch, R-Utah, addressed those claims in a lengthy opening statement.
“Under no objective standard is this bill being rushed or forced through this committee or through either congressional chamber,” he said.
The ranking Democrat on the committee, Sen. Ron Wyden of Oregon, challenged him on that.
“There has not been, nor will there be, a single hearing on the details of this proposal,” Wyden said.
Both the Senate and House plans would increase the federal deficit by $1.5 trillion over the first decade.
The Senate bill would double the standard deduction, deeply cut the corporate tax rate, and repeal the federal deduction for local and state income taxes and property and sales taxes. Democrats say that’s a transparent tax cut for business, loaded onto the backs of the middle class.
Republicans say the bill will encourage multinational corporations to invest and produce in the U.S., and stimulate economic growth here — in essence, a revival of the trickle-down theory of the Reagan years, which claimed, erroneously, that giant tax cuts would boost the economy so much that even a lower tax rate would produce more tax income.
Republicans, who control both chambers, differ over the deduction for state and local taxes, the future of the estate tax on inheritances and the timing of the corporate tax cut.
The committee will meet again Tuesday morning to question members of the bipartisan Joint Committee on Taxation, which released analysis Monday showing that the bill would increase taxes in 2019 for 13.8 million middle-income households earning less than $200,000 a year.
That group, about 10 percent of all taxpayers, would see tax increases ranging from $100 to $500, with those earning between $75,000 and $200,000 seeing increases of more than $500.
According to the analysis, 21.4 million households will have steeper tax bills by 2025.
But Hatch said Monday that the analysis shows that Americans at all income levels will get a tax break, and that the middle class will get a larger percentage of the reductions.
The analysis, he said, showed that those with incomes over $1 million will see their tax burden go up.
“Our bill increases the share of the overall tax burden paid by millionaires and billionaires,” he said.
On the tail end of his trip to Asia, President Trump inserted himself into the mix Monday, calling for Republicans to use the tax plan to do away with the individual mandate under the federal health care law.
“Now how about ending the unfair & highly unpopular Indiv[idual] Mandate in O[bama]care and reducing taxes even further,” he tweeted from overseas.
After commending House and Senate Republicans for their work, Trump called for cutting the top tax rate to 35 percent, with “the rest going to middle income cuts.”
The suggestions could complicate House and Senate efforts, neither of which include health care provisions. The House bill retains the existing top tax rate of 39.6 percent, while the Senate proposal cuts it slightly to 38.5 percent – one of several issues the two chambers will need to iron out.
And using the tax bill as a back-door way to kill the Affordable Care Act, which the Republicans failed to do in a straightforward way, could pull a few key senators away from the tax overhaul, effectively killing it.
With few votes to spare, Republicans in both chambers have little wiggle room to deliver a tax package to the president’s desk by Christmas to seal the first major legislative accomplishment of his presidency.
The House could vote as early as Thursday on its measure, while the Senate will debate its proposal all week before breaking for the Thanksgiving holiday. When both chambers return, they will have only 12 legislative days to work out the differences in the two bills.
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