Republicans would add $ 2.6 Trillion deficit to this years budget alone
WASHINGTON (Reuters) - Republicans in the U.S. House of Representatives unveiled an election-year tax plan on Tuesday that is unlikely to become law but could energize party voters this autumn by promising permanent tax cuts for individuals and most business owners.
Days before lawmakers head home for five weeks of summer campaigning before the Nov. 6 congressional elections, House Ways and Means Committee Chairman Kevin Brady rolled out a “Tax Reform 2.0” proposal that would also expand savings opportunities for families and workers while expanding write-offs for start-up businesses.
“This is an excellent first step,” Brady, a Republican, told reporters after showing the plan to members of his party.
House Republicans plan three pieces of legislation covering permanence, savings and business in hopes of reaping some success in the Senate. Other ideas, including a measure to protect capital gains on business investments from inflation, are also under discussion.
Brady expects his committee to vote on legislation in September, setting the stage for a House floor vote.
But new tax legislation is unlikely to succeed in the Senate, where Republicans would need support from Democrats, who opposed last year’s overhaul that permanently slashed corporate taxes but provided only temporary reductions for individuals and business owners.
Democrats charged that the tax law largely benefited wealthy Americans and corporations.
Some $1.1 trillion of the cuts will expire after 2025, a factor contributing to the overhaul’s unpopularity with voters, according to polling.
“Don’t expect the sequel to be any better than the original. More of a bad idea is still a bad idea,” said Representative Lloyd Doggett, a Democrat on Brady’s committee.
But Republicans hope new legislation could appeal to voters, while helping focus the congressional election campaign on buoyant economic growth, rather than President Donald Trump’s trade wars, immigration policy and federal probes into Russian election meddling.
“Voters like tax cuts. I don’t know of too many people who say: ‘Raise my taxes.’ It’s what the people want. They want to keep their money,” said Representative Scott DesJarlais.
But some Republicans are concerned about adding hundreds of billions of dollars more to the federal deficit, and the new plan offers no way to pay for an extension of the cuts.
Additionally, the proposal would create “fully flexible” Universal Savings Accounts for families, allow education savings to be spent on apprentice fees and give new parents penalty-free access to retirement accounts for child expenses.
It also calls for allowing start-up companies to write off more of their initial costs as a way to foster innovation and productivity.
While Senate action is unlikely before the November elections, the Senate could use a House measure during the post-election lame-duck session as a vehicle for bipartisan legislation to address provisions of the 2017 overhaul that have had unintended effects, including higher-than-expected tax bills for some corporations.
Reporting by David Morgan; Additional reporting by Lisa Lambert; Editing by Bill Trott and Peter Cooney