Political pressure mounts over federal tax “reform.” But a final bill is nowhere in sight and more hurdles seem to be cropping up.
Stinging election losses for the GOP on Tuesday left House Speaker Paul Ryan (R-Wis.) saying once tax changes occur, “people will see their paychecks going up, they’ll see faster economic growth, better jobs being created.”
“I think that’s going to bear fruit politically.”
For the short term, at least, that sounds like wishful thinking.
Senate Finance Committee Chairman Orrin Hatch (R-Utah) told reporters Wednesday that the high-profile election losses could complicate the tax push.
This seemed to suggest the GOP House measure, widely criticized as biased in favor of corporations and the rich, may need to tilt more toward the middle class.
“I think we’ve been moving that way anyway,” Hatch said.
Further clouding the picture is that the Senate and House are moving hesitantly on separate tracks.
One example: The Senate majority is perceived as more willing than the House to kill or curb state and local tax deductions. This would hike tax payments for many New Yorkers.
Also, the Senate bill would delay slashing the corporate tax rate from 35 to 20 percent until 2019.
If such steps as these aren’t taken — unpopular as they may be with certain citizens — the tax changes threaten to explode the deficit, fiscal conservatives say.
Before departing for Asia, President Donald Trump offered happy hype of his own by prematurely celebrating tax relief as a “big, beautiful Christmas present” for Americans.
Rather than lead the way through the thicket, however, the White House seems to be waiting for Congress to work out details and present Trump with legislation he can sign and call the greatest tax cut ever — whatever the facts may be.
Looming in the background is the release of the Paradise Papers — documents that illustrate the complex offshore strategies elite corporations and wealthy individuals use to cut tax liabilities.
Trump has talked about acting through budget and tax measures to “repatriate” U.S. wealth, but it is unclear exactly how this would be done, if at all, under House or Senate plans.
Members of Congress also may have a hidden incentive to act slowly rather than quickly. A broad range of special-interest groups can be expected to lobby to preserve certain tax breaks. These groups fund congressional campaigns.
Quick action threatens to shut the spigot early — before the 2018 federal election season is in full swing.
Republican efforts to change the health-insurance system have many costly moving parts, too — and that effort also remains unfulfilled.