04/19/2018

Senate GOP Uneasy about New Tax Bill

They are divided on whether to push a second tax bill before the midterm elections

Congressional Republicans are divided on whether to push a second tax bill before the midterm elections this fall. House Speaker Paul Ryan (R-WI) and President Donald Trump believe additional tax cuts would energize the GOP base and improve Republicans’ odds of retaining control of both the House and Senate.

A second tax bill would likely make individual tax cuts permanent and extend full expensing for businesses. The tax law passed last year permits businesses to fully expense new and used capital investments for five years. Lower corporate tax cuts enacted last year are permanent; however, without further action, individual cuts will expire in 2026.

Congressional Democrats seized on the expiring middle-class tax cuts as evidence that Republicans were more interested in taking care of corporations in the tax law. Some Democrats said that if Republicans now want to make the individual cuts permanent, other pieces of the law should also be revisited.

“Let’s see what they do, but if they’re going to create more debt, and they’re not going to pay for it, I think we can show the American people that is a shell game,” said House Minority Whip Steny Hoyer (D-MD).

Some Senate Republicans are also leery of allowing Democrats in states that voted for Trump – such as West Virginia, Montana, Indiana and Missouri – to vote for additional tax cuts right before a momentous election this fall. Senate Majority Leader Mitch McConnell (R-KY) has hedged on whether he would bring up another tax bill.

“Of course, we would like to make the individual tax cuts permanent," McConnell said. "We may. We’ll take a look at it.”

This article was provided to OSAE by the Power of A and ASAE's Inroads.