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Financial Planning > Tax Planning > Tax Reform

Key GOP Senator Susan Collins Lays Out Her Demands for Tax Bill

By Sahil Kapur

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Republican Sen. Susan Collins of Maine said Monday she’s opposed to two tax breaks for the wealthy that her party leaders are pushing for, indicating that her vote won’t be easy to win on President Donald Trump’s top legislative priority.

“I do not believe that the top rate should be lowered for individuals who are making more than $1 million a year,” Collins said during an interview with Bloomberg News. “I don’t think there’s any need to eliminate the estate tax.”

Repealing the estate tax and cutting the individual rate from 39.6% for top earners “concern me,” she said, adding that she’s conveyed her opposition to party leaders.

(Related: Kudlow to Trump: Push Tax Cuts Now — or Else) 

Collins, a moderate Republican who played a decisive role in thwarting several iterations of Obamacare replacement legislation, offered her most pointed comments on her priorities for a tax bill to date.

She added that the structure of the estate tax — a 40% levy applied to estates worth more than $5.49 million for individuals or $10.98 million for couples — means it avoids hitting “the vast majority of family-owned businesses and farms and ranches.” She said she’s open to adjusting the cutoff level slightly upward.

The White House and GOP leaders released a tax framework last month that calls for a top individual rate of 35% and leaves room for tax committees to add another rate above that. It also proposes the repeal of the estate tax. The House Ways and Means Committee is scheduled to release its version of a tax bill on Wednesday. Collins said the Senate will likely offer a tax bill that differs from the House version.

Collins’s demands are important because Republicans have only 52 seats in the 100-member Senate and little hope of Democratic support — they can’t afford to lose more than two members to get a bill passed.

Still, she said: “There is far more outreach on the tax bill” than there was on health care.

Collins declined to say she’ll oppose a tax bill that adds to the deficit, in contrast to her colleague Sen. Bob Corker of Tennessee. But she said she cares about the debt and doesn’t want the tax bill to “blow a hole” in the deficit. She argued that “certain tax cuts done right will increase economic growth” and produce revenue.

“I hope very much to be able to support a tax reform package,” Collins said. “It’s very difficult — I’m not going to say I can guarantee that because I don’t know what’s going to be in it.”

—Read Muddled White House Tax Message Clouds Pitch for Trump Plan on ThinkAdvisor.

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