UPDATE — 11/27, 2:29 p.m. EST: CBO analysis of the Senate’s “Tax Cuts And Jobs Act” released Sunday shows Americans making $30,000 or less per year would see a federal tax increase by 2019, while those with incomes under $75,000 will pay more to the IRS by 2027.
The increases for lower income individuals are mainly due to the bill’s inclusion of the Obamacare mandate repeal, which provided tax credits for those enrolled in a health insurance plan.
“Unfortunately, this is not the first time CBO has vastly overestimated the impact of the deeply flawed individual mandate,” a statement from Senate Finance Committee spokeswoman Julia Lawless read. “And, for members concerned about the sunset date for individual tax cuts, Democrats will have a chance to make these strong middle-class tax cuts permanent on the floor.”
As the Senate prepares its tax reform legislation for debate, opposition to the bill has grown to include some Republican and nearly all of the chamber’s Democratic members.
The “Tax Cuts And Jobs Act” sunsets a number of tax deductions used by middle class Americans like home sale profits, causing the the bill to lose momentum along with the comments of at least three GOP senators. Ron Johnson (R-Wis.) announced his opposition to the bill last week, specifically citing how it favors large corporations over small businesses.
“I have no problems in making all American businesses competitive globally,” said Johnson. “This isn’t anti-big corporation at all. When you’re going to do a tax reform, you have to treat them equitably so they can maintain their competitive position here at home as we’re making them competitive globally.”
Susan Collins (R-Maine) hasn’t taken a public stance to-date, but said Sunday she would “like to see changes” to the bill, including the elimination of the Obamacare mandate repeal provision. Jeff Flake (R-Ariz.) and Bob Corker (R-Tenn.) are also unsure about supporting the legislation, citing budgetary concerns.
If all four vote “no” the bill is unlikely to pass, as the White House seems to have failed to convince conservative Senate Democrats outright on the merits of their version of tax cuts. However, Joe Manchin (D-W.Va.) said he has not ruled out voting in favor and Heidi Heitkamp (D-N.D.) and Joe Donnelly (D-Ind.) have signaled they are open to working with their Republican colleagues to amend the bill.
In addition to Washington lawmakers, former Defense Department Secs. Leon Panetta, Chuck Hagle and Ash Carter have announced their opposition to both of Congress’ tax proposals in a letter to congressional leaders Wednesday, calling it a threat to national security due to inevitably “even deeper reductions” to defense spending.
“We are having this debate now and talking about how underfunded the military is . . . but the rest of this same week, Congress is trying to make sure our government takes in trillions of dollars less money through tax cuts.” House Armed Services Committee member Adam Smith (D-Wash.) said last week. “If we believe we have these needs, we ought to be able to pay for them.”
Besides the after-effects, analysis by the nonpartisan Joint Committee on Taxation shows the bill would also shift more of the federal tax burden onto low and middle income brackets while giving America’s top earners relief over the next decade.
Should the Senate bill become law, Americans who currently make less than $75,000 per year would see a tax increase by 2027, while those with annual incomes over $1 million would realize the most significant cuts — while the federal deficit would grow by $1.5 trillion over the next 10 years.
Editor’s note: This article has been updated.
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