U.S. GOP inching toward tax bill, but Democrats unlikely to get on board_Insights_Asia Pacific Daily

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U.S. GOP inching toward tax bill, but Democrats unlikely to get on board

Insights2017-11-14

U.S. Republicans are hammering out the details of a tax overhaul that could have a major impact on individuals and companies. But experts doubt Democrats will get on board, and that could present a challenge in passing the bill. U.S. President Donald Trump wants to pass a tax overhaul, in a bid to make U.S. companies more competitive and boost jobs, at a time when the economy has still not fully recovered from recession. "It's not clear that the Republicans can get any Democrats on board," Alan D. Viard, a resident scholar at the American Enterprise Institute said. "Providing additional tax cuts to the middle class... and scaling back the high-income tax cuts might get a few Democrats on board, but that's far from certain. There's no hope of attracting a large number of Democrats," Viard said. Democrats say that the middle class will suffer under the bill, seeing taxes increase at a time when, despite an overall economic upturn, many families are still struggling. "There probably will be few if any Democrats who support the GOP tax plan," Brookings Institution Senior Fellow Darrell West said. "Democrats see it as heavily tilted towards corporations and wealthy individuals and not doing much for people of average means. That makes it a non-starter from their point of view," West said of the bill in its present form. Some Democrats also believe that lawmakers supporting the bill could feel the sting of voters' ire in the lead up to the 2018 congressional elections. Indeed, Senate Minority Leader Chuck Schumer in recent days has warned GOP members of Congress that there could be harsh consequence for supporting the bill. "I say to every one of my Republican colleagues in the House who come from a suburban district: This bill could be your political doom," Schumer said in a recent speech. "You'll pay a price. House Republicans should kill the bill now, " Schumer said. Some experts said Democrats would only get on board a tax bill that is different from the one Republicans are hammering out. "To get a sizeable number of democrats on board, you'll need to see plans that are very different from what is currently on the table," Dan Mahaffee, senior vice president and director of policy at the Center for the Study of Congress and the Presidency said. "You'll have to see things like closing loopholes, higher taxes on carried interest, and keeping deductions for mortgages and state and local taxes. That makes the math much harder -- both in votes and money -- for the ultimate legislation," Mahaffee said. "If they're moving quickly as the Republicans plan, it's very hard, if not impossible, to hammer out that deal," Mahaffee said, referring to the GOP scramble to pass the bill. Not only Democrats, but some Republicans are also against the bill. Republican Representative Peter King of New York on Sunday contended that hard working Americans will "get screwed" by the legislation, which is expected to see a vote this week. "This is going to have a devastating impact on areas like mine on Long Island and it's unfair," King told Fox Business Network in a recent interview. Under the current bill, deductions for state and local taxes would be eliminated, and King has been pushing in recent weeks to keep those deductions. Many are also concerned that Trump's tax cuts will add to the massive U.S. spending deficit. Viard said the tax cut may boost the economy, primarily through the corporate tax rate cut, which will make the United States a more attractive investment location. However, the revenue feedback from the economic growth would not be enough to fully offset the tax cut's direct revenue loss, so tax receipts would still fall. While passing an unpopular bill could hurt GOP lawmakers, failure to pass any legislation at all could make GOP lawmakers look ineffective in the lead up to the 2018 congressional elections. Nine months into his presidency, Trump has failed to pass any major legislation, after promising voters that he would rectify a number of ongoing economic issues. If that continues, it could start to chip away at Trump's base of support. (ASIA PACIFIC DAILY)

U.S. Republicans are hammering out the details of a tax overhaul that could have a major impact on individuals and companies. But experts doubt Democrats will get on board, and that could present a challenge in passing the bill.

U.S. President Donald Trump wants to pass a tax overhaul, in a bid to make U.S. companies more competitive and boost jobs, at a time when the economy has still not fully recovered from recession.

"It's not clear that the Republicans can get any Democrats on board," Alan D. Viard, a resident scholar at the American Enterprise Institute said.

"Providing additional tax cuts to the middle class... and scaling back the high-income tax cuts might get a few Democrats on board, but that's far from certain. There's no hope of attracting a large number of Democrats," Viard said.

Democrats say that the middle class will suffer under the bill, seeing taxes increase at a time when, despite an overall economic upturn, many families are still struggling.

"There probably will be few if any Democrats who support the GOP tax plan," Brookings Institution Senior Fellow Darrell West said.

"Democrats see it as heavily tilted towards corporations and wealthy individuals and not doing much for people of average means. That makes it a non-starter from their point of view," West said of the bill in its present form.

Some Democrats also believe that lawmakers supporting the bill could feel the sting of voters' ire in the lead up to the 2018 congressional elections.

Indeed, Senate Minority Leader Chuck Schumer in recent days has warned GOP members of Congress that there could be harsh consequence for supporting the bill.

"I say to every one of my Republican colleagues in the House who come from a suburban district: This bill could be your political doom," Schumer said in a recent speech.

"You'll pay a price. House Republicans should kill the bill now, " Schumer said.

Some experts said Democrats would only get on board a tax bill that is different from the one Republicans are hammering out.

"To get a sizeable number of democrats on board, you'll need to see plans that are very different from what is currently on the table," Dan Mahaffee, senior vice president and director of policy at the Center for the Study of Congress and the Presidency said.

"You'll have to see things like closing loopholes, higher taxes on carried interest, and keeping deductions for mortgages and state and local taxes. That makes the math much harder -- both in votes and money -- for the ultimate legislation," Mahaffee said.

"If they're moving quickly as the Republicans plan, it's very hard, if not impossible, to hammer out that deal," Mahaffee said, referring to the GOP scramble to pass the bill.

Not only Democrats, but some Republicans are also against the bill.

Republican Representative Peter King of New York on Sunday contended that hard working Americans will "get screwed" by the legislation, which is expected to see a vote this week.

"This is going to have a devastating impact on areas like mine on Long Island and it's unfair," King told Fox Business Network in a recent interview.

Under the current bill, deductions for state and local taxes would be eliminated, and King has been pushing in recent weeks to keep those deductions.

Many are also concerned that Trump's tax cuts will add to the massive U.S. spending deficit.

Viard said the tax cut may boost the economy, primarily through the corporate tax rate cut, which will make the United States a more attractive investment location.

However, the revenue feedback from the economic growth would not be enough to fully offset the tax cut's direct revenue loss, so tax receipts would still fall.

While passing an unpopular bill could hurt GOP lawmakers, failure to pass any legislation at all could make GOP lawmakers look ineffective in the lead up to the 2018 congressional elections.

Nine months into his presidency, Trump has failed to pass any major legislation, after promising voters that he would rectify a number of ongoing economic issues. If that continues, it could start to chip away at Trump's base of support.

(ASIA PACIFIC DAILY)

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