GOP tax plan
On Tuesday night, Senate Finance Committee Chairman Orrin Hatch (R-Utah) released the latest version of the Senate tax bill, to be debated Wednesday morning in his committee. Along with eliminating the Affordable Care Act's individual mandate — which would free up more than $300 billion but also raise premiums by an average of 10 percent and result in 13 million fewer people with health insurance, according to the Congressional Budget Office (CBO) — the new version of the bill permanently cuts the corporate tax rate to 20 percent, from 35 percent, while setting a 2026 expiration date on all tax cuts for individuals.
For the next eight years, the child tax credit would rise to $2,000 per child, from $1,000 now and $1,650 in an earlier version of the tax bill, and trim rates for upper-middle-income people by 0.5 or 1 percentage point. The bill would also trigger $25 billion in immediate Medicare cuts as well as $85 billion to $90 billion in other spending cuts, the CBO estimated, unless Congress votes separately to negate those cuts. The benefits for individuals expire at the end of 2025 so that Congress won't pay for the tax cuts with more than $1.5 trillion in deficit spending, to conform with Senate rules.
It's unclear how the changes will affect the bill's chances. Conservative Republicans will be pleased with zeroing out the individual mandate, but "the attack on former President Barack Obama's signature legislative achievement is likely to rule out the already slim possibility of support from Democrats, and the prospect of adding millions to the ranks of the uninsured could trouble moderate Republicans who voted down previous repeal efforts," The Washington Post reports. "Senators concerned about restraining national debt — long one of the top goals for the GOP — may also raise howls about the plan to sunset the individual income tax cuts in 2025. Congress is unlikely to allow a large tax increase on taxpayers at that point, which could mean a big hit to the deficit over the long run."