Tax cuts appear to be a wrap, but let’s not count our chickens before they hatch. Here’s where things stand right now…
from Zero Hedge:
In an announcement that effectively clears the way for the GOP’s Congressional leadership to send the Republican tax-reform plan to President Donald Trump’s desk, Maine moderate Susan Collins said Monday afternoon that she intends to vote for the bill.
As Republicans try to pass their No. 1 legislative priorty by week’s end, a new controversy surrounding its provisions surfaced late Sunday after the International Business Times’s David Sirota published a story claiming that several last-minute adjustments to the bill would financially benefit Sen. Bob Corker, who had announced that he would vote for the reconciled bill shortly after the adjustments were made. Corker was the only Republican to oppose the Senate version of the bill.
Speaking in his defense, Corker said he hadn’t bothered to read the bill before deciding to vote for it.
Other key undecideds – Marco Rubio, Bob Corker, Mike Lee – have already come out in favor of the measure in the last few days. Meanwhile, John McCain – who had indicated that he would vote for the bill – will likely miss the vote due to his deteriorating health.
Arizona’s Jeff Flake remains the last key undecided vote. Senate GOP can lose one vote and still ensure passage, given expected absence of John McCain; Count assumes all senators besides McCain present and voting as well as unified Democratic opposition.
Collins is explaining her reasoning for voting for the bill on the Senate floor. Watch live below:
“I rise to express my support for the conference agreement on the Tax Cuts and Jobs Act. … This legislation will provide tax relief to working families, encourage the creation of jobs right here in America and spur economic growth that will benefit all Americans,” Collins said from the Senate floor.
She added that “most Maine households with see their taxes go down.”
Senate Republicans believe they have the votes to pass the tax plan as soon as Tuesday evening, according to the Hill.
As the Hill pointed out, Collins supported the Senate’s version after getting her amendments included in the bill, as well as a promise from Senate GOP leadership to pass the bills aimed at stabilizing the individual health insurance market under ObamaCare. Several amendments that Collins offered were incorporated into the bill, including the restoration of a $10,000 deduction for state and local property taxes and a lower threshold for deducting medical expenses.
Late last week, Marco Rubio said he would vote for the bill after successfully pushing for a larger child tax-credit. Utah’s Mike Lee, who had objected to the bill for similar reasons, has also thrown his support behind the bill.
Just finished reading the final Tax Cuts and Jobs Act. It will cut taxes for working Utah families. I will proudly vote for it.
— Mike Lee (@SenMikeLee) December 18, 2017
Here’s a primer explaining what to expect this week, courtesy of Ransquawk:
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- The House Rules Committee meets on Monday evening to discuss the plan, the House is expected to vote on Tuesday and the Senate will have its final say on either Tuesday or Wednesday.
- Senator John McCain is not planning on casting his vote on the Republican tax overhaul. He is returning
- home for Christmas after having spent a few days in hospital due to side-effects caused by his brain cancer treatment. His wife confirmed that McCain will be back if his vote is needed, although according to John Cornyn his absence does not seem to threaten the tax bill.
- Republican Thad Cochran is also ill and Senator Susan Collins has not made a final decision on the tax overhaul.
- Republican aides have suggested that Senators Lee, Collins and Flake will be a yes, while Senator Corker has moved to the yes camp after voting no in the previous stage. The over-riding feeling seems to be that the Republicans have the votes to get the bill onto President Trump’s desk later this week, even if it has to be forced through via the tie-breaking vote of Vice President Mike Pence.
- To summarise (via CNN).
- If Senator McCain is absent and the above three senators vote yes, Republicans will have 51 “yes” votes. The bill passes.
- If Senator Cochran, who has also been ill, joins McCain in missing the vote, and the above three senators vote for the bill, Republicans have 50 votes and the bill passes.
- If McCain is absent, Cochran is in attendance, and say, Collins votes “no,” Republicans have 50 votes and the bill passes.
- If McCain and Cochran are absent, and one of the above three senators vote “no,” Republicans would be in a 49-49 situation – in which Vice President Mike Pence would cast the tie-breaking vote and the bill passes.
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Earlier today, House Speaker Paul Ryan said he intends to bring the reconciled bill for a vote on the House floor tomorrow afternoon.
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As a reminder, here is Bloomberg‘s breakdown of what we know so far as the final Republican bill heads for votes in the House and Senate next week.
Corporate Tax Rate
Current law: 35 percent
Proposed: 21 percent, beginning in 2018.
Individual State and Local Tax Deductions
Current law: Individuals can deduct the state and local taxes they pay, but the value is subject to certain limits for high earners.
Proposed: Individuals can deduct no more than $10,000 worth of the deductions, which could include a combination of property taxes and either sales or income taxes.
Obamacare Individual Mandate
Current law: An individual who fails to buy health insurance must pay penalties of $695 (higher for families) or 2.5 percent of their household income — whichever is higher, but capped at the national average cost of the most basic, low-premium, high-deductible plan.
Proposed: Repeal the penalties.
Mortgage Interest Deduction
Current law: Deductible mortgage interest is capped at loans of $1 million.
Proposed: Deductible mortgage interest for new purchases of homes would be capped at loans of $750,000.
Medical Expense Deduction
Current law: Qualified medical expenses that exceed 10 percent of the taxpayer’s adjusted gross income are deductible.
Proposed: Reduce the threshold to 7.5 percent of AGI for the tax years 2017 and 2018.
Child Tax Credit
Current law: A $1,000 credit for each child under 17. The credit begins phasing out for couples earning more than $110,000. The credit is at least partially refundable to qualified taxpayers who earned more than $3,000.
Proposed: Double the credit to $2,000 and provide it for each child under 18 through 2024. Raise the phase-out amount to $500,000, and cap the refundable portion at $1,400 in 2018.
Current law: Applies a 40 percent levy on estates worth more than $5.49 million for individuals and $10.98 million for couples.
Proposed: Double the thresholds so the levy applies to fewer estates. The higher thresholds would sunset in 2026.