Republicans’ Haste Warps Their Tax Legislation

Overall, Shay writes, “There is a pervasive failing in the bill to introduce guardrails around substantial rate reductions that would effectively police the many new boundaries between rate differences that the bill creates.”

Some provisions are included to score cheap political points. Conservatives targeted higher education, elite liberal institutions in their book, with taxes on the endowments of better-off colleges and on the tuition waivers graduate students receive for working as researchers or teaching assistants.

There were no hearings that weighed the effect of these measures. University officials claim they would reduce research and cut financial assistance for middle-income students — at a time the federal government is cutting back in the same areas.

Likewise, the House version would stop allowing taxpayers to take a deduction for medical expenses that exceed 10% of their income. That would hurt middle-and working-class families.

On matters small and large, Republican leaders have deliberately left no time for definitive congressional analysis of the economic and social fallout. Then they’ve summarily dismissed research by respected outside groups like the Tax Policy Center, which has found that the legislation decisively tilts to the well-to-do — by 2027, the wealthiest 1% would get 60% of the benefits, the group says — and that by 2027, tens of millions of middle-class families would pay higher taxes.

The Senate bill has a provision for triggering automatic additional corporate tax cuts in the unlikely event that revenues exceed expectations. On Tuesday, Republicans inserted a so-called “backstop” provision that would limit tax cuts years from now if there’s a revenue shortfall. Details weren’t provided and it’s probably more of a vote-getting device than a substantive check on ballooning deficits.

Sponsors contend that tax cuts benefiting the middle class that are slated to expire in 10 years actually will be extended by a future Congress. If that’s true, what they don’t acknowledge is that these future cuts would add even more to the deficit, bringing pressure for significant spending reductions. The only big available targets are entitlements like Social Security and Medicare, or military spending.

That’s why there should be a clear path for deficit hawks like Sen. Bob Corker of Tennessee and Jeff Flake of Arizona, or defense hawks like McCain, to send this bill back to the Finance Committee for real hearings, review, debate and analysis. That’s called regular order.

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