House and Senate lawmakers released the final tax cut bill, the Tax Cuts and Jobs Act, late Friday and are expected to vote on it early next week.
Andy Friedman of The Washington Update told ThinkAdvisor on Friday that “it seems they have straddled the contentious issues and found reasonable compromises. The important thing, from the administration’s viewpoint, is they kept virtually the entire corporate cut and made sure it starts next year.”
A full copy of the final bill, which includes 1,097 pages, is available here.
Friedman, a former tax attorney and now public-affairs consultant, explained that “regardless of how the bill is being sold, … this is intended primarily as a tax cut for corporations.”
Businesses, he continued, “receive over two times the benefit that individuals get under the bill (measured by government lost revenue). This balance reflects the Trump administration’s belief that permitting businesses to keep more of their funds will grow the economy, which ultimately will benefit individuals through greater employment and higher wages.”
The permanent rate reduction on “C corporations from 35% to 21% is expected to consume virtually the full $1.5 trillion revenue loss permitted under the bill,” Friedman continued.
“Accordingly, all of the other provisions in the bill must be revenue neutral in the aggregate: every dollar of revenue lost must be offset by a dollar of revenue gained. And the individual benefits must sunset after a period of years,” he explained. “An individual taxpayer thus might end up paying less tax, more tax, or the same tax depending on how the gainers and losers apply to his or her situation.”
Republican legislators were quick to praise the bill’s latest version.
“The conference committee took the best ideas from the House and Senate plans and made an even better bill,” said House Speaker Paul Ryan, R-Wis. “The Tax Cuts and Jobs Act is now only two votes and a signature away from becoming the law of the land.”
House Ways and Means Committee Chairman Kevin Brady, R-Texas, explained, “For the first time in 31 years, the House and the Senate have now come together to deliver pro-growth tax reform that will help more Americans across our country keep more of their hard-earned money. … I appreciate my colleagues’ hard work and look forward to voting on this bill in the House next week.”
Democrats heavily criticized the bill’s contents for putting corporate interests ahead of what’s best for many individuals.
Senate Finance Committee Ranking Member Ron Wyden, D-Ore., said just before 6 p.m. Friday that “Americans are learning how many tax promises Republicans are willing to break, how many cons they’re willing to run, how many hardworking families they’re willing to betray to guarantee handouts to powerful CEOs and campaign donors.”
The country, Wyden continued, “has been watching and protesting with anger as Republicans are now days away from passing their backdoor deal that digs into the pockets of the middle class to pay for massive tax breaks for multinational corporations. This is a historically unpopular bill that hikes taxes on the middle class, leaves 13 million Americans uninsured and raises premiums for millions more.”
Senate Minority Leader Chuck Schumer, D-N.Y., added in a statement Friday evening: “Under this bill the working class, middle class and upper middle class get skewered while the rich and wealthy corporations make out like bandits. It is just the opposite of what America needs, and Republicans will rue the day they pass this.”