Congressional Republicans have gotten the message. They know the bill currently before the conference committee is the least popular piece of tax legislation in modern American history. And so, in light of the ugly polls and angry phone calls, the GOP has concluded that the distribution of tax cuts in their plan is fundamentally unfair — the legislation simply gives far too much tax relief to the middle class, and far too little to millionaires and billionaires.
At least, this appears to be the party’s conclusion, given the latest developments in the conference committee. Earlier this week, GOP lawmakers decided to lower their bill’s top income tax rate from 39.6 to 37 percent — thereby providing America’s wealthiest people with another $100 billion in tax cuts. Now, in order to offset the cost of that change, Republicans are considering scaling back the size of their bill’s middle-class tax cuts — by making them even more temporary than they were already. As the Washington Post reports:
Under a tax overhaul bill passed by the Senate earlier this month, tax cuts for all American households would expire at the end of 2025. But Republicans are now considering having those tax cuts expire in 2024.
… Shortening the tax cuts for individuals and families by one year could free up close to $170 billion, according to estimates from the Joint Committee on Taxation, but it could be seen as a budget gimmick if Republicans promise to extend the tax cuts at a later date.
Meanwhile, Marco Rubio appears to be the only Republican senator who actually wants to make the bill (a tiny bit) less politically toxic. Or, at least, he wants you to believe that he wants to do that.
The Florida senator has called for making the bill’s child tax credit refundable, so that working families who don’t earn enough to pay much federal income tax — but are still subject to payroll taxes — can enjoy some benefit from the legislation. When the Senate first voted on a tax bill earlier this month, Rubio argued that instead of cutting the corporate rate from 35 percent to 20 percent, Republicans should cut it to 21 percent — and use the consequent savings to finance a child subsidy for the working class. His GOP colleagues voted down that measure, out of concern that a 21 percent corporate rate would stifle economic growth. (The Business Roundtable, corporate America’s official lobby, had previously requested a 25 percent rate as their opening offer in tax-reform negotiations.) Rubio voted for the tax bill, anyway.
And then, this week, the Republican leadership decided that, on second thought, they did want to bump the corporate rate up to 21 percent — so as to help finance various changes to the legislation, including the aforementioned cut in the top marginal rate. Rubio was displeased.
Now, he has (reportedly) decided to put his vote where his tweets are. Here’s the Post again:
Sen. Marco Rubio (R-Fla.) has informed Senate leaders he intends to vote against the Republicans’ $1.5 trillion tax plan unless it includes a larger expansion of a child tax credit, according to a Senate GOP source.
Rubio and Sen. Mike Lee (R-Utah) proposed a change to expand the tax credit as part of the tax bill that passed the Senate, but the plan was opposed by GOP leadership and voted down.
… Rubio and Lee want to allow millions of families who pay payroll taxes but do not earn enough to pay income taxes to claim the expanded credit. The change they’re now pushing would expand the credit by $80 billion over 10 years, a smaller change than he proposed to the Senate bill.
Republicans could still, technically, pass their bill without Rubio, so long as no other GOP senator turns against the legislation. But without Rubio, McConnell can only afford to lose one other vote, assuming Bob Corker still cares about the deficit. And Senators John McCain and Thad Cochran have both missed votes this week due to health problems. McCain’s condition is particularly severe, and it’s conceivable that the malady could keep him sidelined until next year — when Doug Jones will join the Senate.
It’s true that Rubio has rarely displayed the courage of his convictions. But, all things considered, it would be smarter for McConnell to give Marco his measly $80 billion, rather than bet his party’s top legislative priority on McCain’s health, Collins’s constancy, and Rubio’s cowardice.