Republicans Just Announced That They’ll Need Democratic Votes For Their Tax Bill

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When politicians are working on a new policy, you’d normally expect to get a short statement of principles first, followed later on by a document that fleshes things out a bit more. Finally, as a last step before actual legislation, you’d get a white paper that outlines specific details of the new policy.

Obviously we didn’t get that from Republicans on health care, and we’re not getting it on tax reform either. As the Wall Street Journal points out, we’re getting just the opposite:

Top congressional Republicans and the Trump administration agreed to drop a plan to tax imports and exempt exports as part of their strategy to rewrite the U.S. tax code….Dropping the idea was part of a broad statement of principles released by Republicans for tax policy on Thursday.

….The new document included less detail than the president’s campaign plan, the House GOP’s June 2016 blueprint or the one-page offering from the White House in April. For instance, it makes no mention of a specific corporate tax rate or rates for individuals. It also doesn’t mention staples of GOP plans such as a higher standard deduction or estate-tax repeal, perhaps a sign that the statement doesn’t cover the breadth of where the party may yet go.

The entire statement is about the length of a blog post, and the single paragraph that actually talks about principles is less than 200 words long:

Above all, the mission of the committees is to protect American jobs and make taxes simpler, fairer, and lower for hard-working American families….We also believe there should 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 goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas….While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform.

There you have it. Lower taxes for hardworking Americans, lower taxes for business, and the ability for businesses to write off 100 percent of their capital expenses in a single year. Also, the border adjustment tax is dead.

Now here’s the interesting part:

The goal is a plan that…places a priority on permanence….Our expectation is for this legislation to move through the committees this fall, under regular order.

Translated into English, this means that Republicans don’t want a ten-year tax cut like George Bush’s. They want a permanent tax cut. The problem is that with the border adjustment tax out of the picture, there’s nothing to balance the tax cuts and no way to make their tax bill revenue-neutral. It’s going to increase the deficit,¹ and that means Republicans can’t use reconciliation, as they’re doing with health care. It has to be passed under regular order, and bills require 60 votes under regular order. That means they need to corral at least eight Democratic votes in the Senate.

And yet, so far they’ve done exactly zero to get Democrats on board. The whole plan is being put together by the Big Six: four Republican members of Congress and two Republican members of Trump’s administration. So what are they planning to offer Democrats in order to get their support for this budget-buster of a bill? Anything? Or just more bluster about how Dems are obstructionists blah blah blah? We’re all eager to find out, aren’t we?

¹Demonstrating once again—as if we needed it—that Republicans only care about the deficit when a Democrat is president and the topic is spending money on the poor.


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