As House Republicans unveiled a sweeping new tax bill Thursday that would dramatically cut taxes for corporations and the wealthy and cost $1.51 trillion over the next 10 years, several GOP Congress members presented a unified front of optimism.
“I was very critical and skeptical of it up to this point, but I think after what I saw rolled out today, it’s kind of like bringing out a new model of a car you haven’t seen before,” said Rep. Ted Yoho (R-FL).
Yoho and colleagues including Reps. Rick Allen (R-GA), French Hill (R-AK), and Bradley Byrne (R-AL) said in interviews that they believe the steep tax cuts proposed in the new Tax Cuts and Jobs Act would be good for the economy and would stimulate wage and job growth. Allen went so far as to claim the bill would add 20 million new jobs.
The House Republican tax bill, explained
“If we can get 20 million people back to work, it’s going to be big,” he said. “We’ve got 6.5 million jobs open right now. This puts pressure on wages; wages grow; then it’s more incentive to go to work than to stay home.”
Despite the confidence from some House Republicans, the tax bill is already facing a rocky future, just a few hours after it was introduced. Republican Reps. Frank LoBiondo of New Jersey and Lee Zeldin of New York have already come out against the bill, citing opposition to its proposed elimination of the state and local income tax deductions and a $10,000 cap on property tax deductions. Their states already have high taxes.
“We need to fix this State and Local Tax deduction issue,” Zeldin said in a statement. “Adding back in the property tax deduction up to $10,000 is progress, but not enough progress.”
That’s a concern that Byrne, who represents towns and cities along Alabama’s Gulf Coast, shares. First and foremost, he wants to make sure his constituents get a tax break. With few big corporations based in his district, Byrne said the corporate tax cuts proposed in the GOP bill won’t do his constituents much good.
“I care less about big corporations than I do about working families because I don’t have a lot of big corporations,” Byrne said in an interview.
And Alabama already has low property taxes but a higher sales tax, so Byrne also isn’t convinced the $10,000 property tax deduction cap will do much for his district.
“The people in high property tax states are getting a tax break; the people in my state aren’t going to get the same for sales taxes, so I’m not real happy about that, but you’ve got to look at this whole thing in total,” he added. “If, on balance, it is a good tax break for my folks, I’m likely to support it.”
It’s not just displeased lawmakers that House leaders have to worry about; lobbying and industry groups are voicing concerns as well. The influential National Federation of Independent Business and the US Black Chambers Inc. have come out against the bill, saying it doesn’t do enough help small businesses. The real estate industry is actively opposing the bill for its new limit on mortgage interest deductions.
The House bill released today is just the starting bid; the Senate is likely to release its own version of tax reform next week. But the clock is ticking — Republicans have given themselves a deadline of the end of the year to agree on the details and get a bill on President Trump’s desk. That could be tricky, given the amount of disagreement already bubbling up.
Over in the US Senate chambers, Sen. Jeff Flake (R-AZ) took to the floor on Thursday afternoon, saying the House bill isn’t true tax reform and doesn’t go nearly far enough toward solving the nation’s $20 trillion debt.
“We cannot simply rely on rosy economic assumptions, rosy growth rates to fill in the gap; we’ve got to make tough decisions,” Flake said. “We’ve been hearing a lot about cuts, cuts, cuts. If we are going to do cuts, cuts, cuts, we have got to do wholesale reform. With the national debt exceeding $20 trillion, we have got to do this seriously.”
Flake speaking up this early could spell trouble for the bill, since Republicans can only afford two defections in the Senate before they lose enough votes to effectively kill it.
Yoho and other GOP Congress members did not seem to think that the tax bill would add substantially to the deficit.
“I don’t think there will be one; I think you’ll see a boost of the growth that’ll offset any cost to the deficit,” Yoho said.
Rep. David Valadao (R-CA) added that the bill would “bring some real dollars in” to reduce the federal deficit by growing the economy.
Sen. Marco Rubio (R-FL) has also voiced concerns about the House bill, specifically on the proposed $600 increase to the child tax credit. Rubio and Sen. Mike Lee (R-UT) have been advocating that the current $1,000 tax credit be increased to $2,000.
“When you compare that to some of the tax cuts you’re going to see in other parts of this tax reform, I would say that’s not nearly enough,” Rubio said in a speech on the Senate floor. “It’s certainly not enough to make a difference.”
Jeff Stein contributed reporting.