The GOP Tax Plan Still Has Some Serious Math Problems

By Yuval Rosenberg and Michael Rainey The GOP Tax Plan Still Has Some Serious Math Problems A day after saying they had a deal on a final tax bill, House and Senate Republicans leaders were still scrambling Thursday to resolve some math problems complicating their rush to unveil the legislation on Friday and set up votes for next week. One Big Question: How to Pay for All the Tax Cuts? The tax writers have been moving rates higher and lower in an effort to meet the demands from within their party while staying below the $1.5 trillion cost limit set by the Senate. But there are signs that the cost is still an issue. “We’re literally trying to squeeze about $2 trillion in tax reform into a $1.5 trillion box and that’s been a problem,” [said]( Senator Ron Johnson (R-WI). The tax committee has reportedly made some expensive changes in the past few days, including tweaking the state and local tax deduction, dropping the top individual tax rate to 37 percent, retaining deductions for medical expenses and eliminating the corporate alternative minimum tax. Those changes reportedly could add [more than $200 billion]( to the cost of the plan. But offsets on the revenue side have been harder to come by. One option under consideration, [according to The Washington Post]( would be to have the tax cuts for individuals and families expire in 2024 instead of 2025 as called for by the Senate bill. “That’s one of the things we’re looking at,” Senate Finance Committee Chairman Orrin Hatch (R-UT) confirmed to the Post. Such a change would reportedly raise nearly $170 billion, but it would also open Republicans up to further criticisms that their tax overhaul is tilted toward businesses and the rich, and that it relies on gimmicks to make the numbers work. Republicans, after all, have said that they expect those individual tax cuts to be extended by a future Congress. Could Marco Rubio Kill the Tax Bill? The other big math problem Republicans face is ensuring they have the votes needed to pass their plan, especially on the Senate side. Sen. Marco Rubio (R-FL) said Thursday afternoon that he would not vote for the GOP tax bill unless the value of the refundable child tax credit is increased. “I think my requests have been pretty reasonable and consistent and direct. Right now the refundability level is $1,100. It needs to be higher. It’s a pretty straightforward ask. If the refundable portion of the child credit is substantially increased beyond the $1,100 it currently is, I’ll vote for the bill. If it’s not, I won’t,” Rubio [said](. President Trump on Thursday said he’s “very sure” Rubio will vote for the tax bill. Sen Mike Lee (R-UT) has also backed a larger refundable child tax credit, and a spokesperson [said]( he is undecided on the bill. Sens. Susan Collins (R-ME) and Bob Corker (R-AZ) say they are waiting to see the final bill to determine how they will vote, and Sen. Jeff Flake reportedly remains undecided, leaving Republicans with at least five uncommitted votes. The GOP can afford to lose only two votes in the Senate. Also, Sen. John McCain is away being treated for brain cancer and it’s not clear when he’ll return, though Senate Majority Whip John Cornyn said he expects McCain will be available for votes next week. Vice President Mike Pence will [delay]( a trip to the Middle East to be in Washington next week and preside over the Senate vote, where he could break a possible 50-50 tie. [Share]( [Tweet]( [Forward]( Paul Ryan Has ‘His Eyes on the Exits’: Report [Politico’s Tim Alberta and Rachael Bade]( drop a blockbuster: “Despite several landmark legislative wins this year, and a better-than-expected relationship with President Donald Trump, Ryan has made it known to some of his closest confidants that this will be his final term as speaker. … He would like to serve through Election Day 2018 and retire ahead of the next Congress. This would give Ryan a final legislative year to chase his second white whale, entitlement reform, while using his unrivaled fundraising prowess to help protect the House majority—all with the benefit of averting an ugly internecine power struggle during election season.” Speculation has been swirling that Ryan could step down once “he’s harpooned his personal white whale of tax reform,” as [HuffPost]( put it. When asked at his weekly press conference whether he’ll be quitting anytime soon, Ryan chuckled and said, [“I’m not, no.”]( [Share]( [Tweet]( [Forward]( Send Us Your Tips and Feedback: Email Yuval Rosenberg at yrosenberg@thefiscaltimes.com and follow me on Twitter [@yuvalrosenberg](. Follow The Fiscal Times on Twitter [@TheFiscalTimes](. Will Your Taxes Really Fit on a Postcard? Republicans have been saying their tax plan will allow Americans to file their taxes on a postcard – “a single, little beautiful sheet of paper,” in President Trump’s words. House Speaker Paul Ryan has been carrying such a postcard around for months as a prop to help pitch the plan, pulling it out of his suit pocket every chance he gets and waiving it around for the cameras as a kind of visual proof of concept. But tax experts have their doubts about the claim. For one thing, who wants all their sensitive personal information floating through the mail system, exposed for all to see? “It’s kind of crazy to say you can file on a postcard when, first, no one is going to put their Social Security number on a postcard,” said Mark Mazur of the nonpartisan Tax Policy Center. Besides, Mazur added, if you’re looking for a short and simple tax form, it already exists: “you already have a giant postcard in the form of the 1040EZ.” The doubling of the standard deduction in the GOP tax plan, along with the reduction or elimination of other deductions, will mean that millions of people can use these shorter tax forms for their 2018 taxes (filed in 2019). But other changes under consideration, such as the curtailment of the state and local tax deduction, could require many households to continue making complicated calculations, especially wealthier taxpayers and people living in high-tax states such as New York and California. “Even though we’re talking about simplification for a large number of taxpayers, there’s still many taxpayers who will have complicated tax situations,” said David Williams of Turbo Tax. And as [Reuters]( reports, the tax preparation industry thinks that there will still be plenty of work for them to do, whatever the final tax bill looks like. [Share]( [Tweet]( [Forward]( Even Republicans Aren’t Wild About the Job This Congress Is Doing Public approval of the job Congress is doing averaged 19 percent this year, according to [Gallup]( — the eighth straight year in which less than one in five Americans has been satisfied with the job lawmakers are doing. GOP leaders might find a silver lining in the dismal numbers: Congressional approval among Republicans jumped from 18 percent last month to 29 percent this month after both chambers passed tax cut legislation. And Republican approval ratings for the year averaged 28 percent, the highest since 2006. But even Republicans aren’t as positive about the GOP-led Congress as they were in February, when they gave lawmakers a 50 percent approval rating. Congressional approval measured by Gallup averages 31 percent since 1974 — and Gallup data might provide a warning for lawmakers as they try to hash out a budget and avoid a government shutdown later this month or next: “The lowest annual average, 14% in 2013, came when Congress' failure to pass a budget led to a partial government shutdown in the fall of that year.” Two bonus poll findings, also from recent Gallup surveys: - “[Seventy-two percent]( of Americans believe the U.S. healthcare system is ‘in a state of crisis’ or ‘has major problems,’ almost the same percentage (71%) who felt that way a few months before the Affordable Care Act was passed seven years ago.” - “[Fifty-six percent]( of Americans say the federal government should be responsible for making sure all Americans have healthcare coverage, up slightly from 52% last year and the highest level in 10 years.” [Share]( [Tweet]( [Forward]( News - [Tax Plan Growth Boost May Vanish Fast, Fed and Economists Agree]( – Bloomberg - [Proposed ACA Mandate Repeal Makes GOP Tax Plan More Unpopular]( – Axios - [The Fed Isn’t the Tax Cut’s Enemy]( – Wall Street Journal - [How the Corporate AMT Affects Different Industries]( – Tax Policy Center - [Private Schools Donors Likely to Win Big from Expanded Loophole in Tax Bill]( – Institute on Taxation and Economic Policy - [Republican Tax Bill Overhauls Rules Many Were Counting On]( – New York Times - [25 Companies That Will Benefit the Most from the GOP Tax Plan]( – CNBC - [Comparing the ‘Trump Economy’ to the ‘Obama Economy’]( – Washington Post - [These States Are Running Out of CHIP Funding]( – CNN - [Democrats Cool to Trump’s Infrastructure Pitch]( – Politico - [Millennials, Gen-X’ers and Boomers Are Still Poorer Than Before the Recession]( – Wall Street Journal - [The New York Times Gets a New Publisher]( – Axios Views - [For Real Results, the Next HHS Secretary Must Boldly Shift to Value-Based Health Care]( – John Engler, The Hill - [Tax Bill Is a Christmas Tree Decorated with Debt]( – Dennis J. Ventry, Jr., The Hill - [Trump Plays Reagan's Game on Tariffs and Taxes]( – Caroline Freund, Bloomberg View - [‘An Orgy of Serious Policy Discussion’ with Paul Krugman]( – Ezra Klein, Vox - [On Tax Cuts, Trump Is the Modern Day JFK]( – Stephen Moore, CNN - [A Vote for This Tax Plan Is a Vote Against Women and Families]( – Kristin Rowe-Finkbeiner, CNN - [This Is What Puerto Ricans Need from the Government. Right Now]( – Lin-Manuel Miranda, Washington Post - [Inequality Is Not Inevitable – but the US 'Experiment' Is a Recipe for Divergence]( – Thomas Piketty et al., The Guardian Copyright © 2017 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com. 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