Senate Democrats call for bipartisan tax reform in letter to GOP

Marie Harrington
Августа 2, 2017

Trump and Republican lawmakers agree on broad contours such as the importance of a simpler tax code, a lower corporate rate and financial relief for the middle class, but the details of an overhaul remain murky.

The White House's chief liaison with members of Congress said Monday that he expects tax writers will begin the legislative process for a tax reform package shortly after returning from August recess, with House floor action possible as soon as October.

"It's time to move onto something else, come back to health care when we've had more time to get beyond the moment we're in", said Sen.

Treasury Secretary Steve Mnuchin has said that while high-income households may see a cut in their top income tax rate, many won't actually pay less because a lot of their deductions would go away. Though he said he favors trimming out the loopholes and special tax deductions that litter the current tax code, "they all have powerful interest groups and you can take on those interest groups, but for that you've got to lay the groundwork".

The reconciliation process would allow the Senate to pass a tax bill with only 51 Republican votes, instead of 60 votes that would require the support of eight Democrats under regular order.

While the leaders stopped short of saying they were surrendering on an issue that's guided the party for seven years, their remarks underscored that Republicans have hit a wall when it comes to resolving internal battles over what their stance should be. "But there has been in tax reform".

"If there's bipartisan support, that's another route too", Short said.

The White House's framework for cutting taxes could widen the deficit at least $5 trillion over 10 years unless there are major changes, budget analysts have warned, a figure that would probably imperil the bill.

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Complicating the Republican effort further is the fact that no member of the White House's senior economic team has been a part of a major tax overhaul bill, and the administration must rely on Congress to pass matching budget resolutions while also raising the debt ceiling, something that has proved more hard than initially expected.

"Right now I think we are seeing a publicity campaign that will label tax cuts as tax reform".

But Senate Finance Committee Chairman Orrin G. Hatch, a key tax-writer, told Reuters on Monday that Mr. Trump's 15 percent rate is "very unlikely" and that it would be "kind of miraculous" to get the rate down to even 25 percent or less.

Short said tax reform is something that has to be done this year, since over the last eight years Americans have endured an economy that was not growing. A second amendment was defeated that would have scrapped it and substituted relaxed coverage rules for insurers, less generous tax subsidies for consumers and Medicaid cuts.

But finding agreement on tax reform is notoriously hard. It suggests there will be "a lower tax rate for small businesses so they can compete with larger ones, and lower rates for all American businesses so they can compete with foreign ones".

The insurance industry notes they're legally required to reduce many customers' costs.

William Gale, a senior fellow at the Brookings Institution and an economist in George H.W. Bush's White House, said it appears that little progress has been made since the administration unveiled its tax goals in April.

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