Democrat victories at the polls last week in Virginia and New Jersey may be the fuel that finally ignited a “sense of urgency” with Republicans. Passing tax reform could be a do or die scenario for the GOP, and they’re feeling it. Former National Republican Congressional Committee Chairman Representative Tom Cole (R-OK) said of the American voters “they are looking for results right now. We have an opportunity to deliver between now and the end of the year, and we need to do it.” Today, Republicans in the House of Representatives showed they received message loud and clear by passing their version of the tax reform bill, though it was close: 227-205.
Senator Lindsay Graham (R-SC) sent a similar message to his colleagues in the Senate: “If you want to destroy the Republican Party, fail on tax cuts.” Many Americans who expect tax reform are holding their breath in fear of not achieving a majority vote in the Senate. As witnessed with healthcare reform earlier this year, celebrating passage in the House could be premature as there can be no more than two defectors in the Senate. Already, Senator Ron Johnson (R-WI) has publicly announced, “I will not vote for the current version the tax reform bill if they can pass it without me that is fine.” Johnson feels the process is unfair for pass-thru entities who pay taxes at the individual rate of 30% while other businesses and large corporations will be able to file at 20%. Senators Susan Collins (R-ME) and Lisa Murkowski (R-AK) are indicating the inclusion in the bill of repealing the individual mandate under Obamacare may result in them not supporting it. Also, the usual suspects Bob Corker (R-TN), Jeff Flake (R-AZ) and John McCain (R-AZ) could be dangerous, as they might use their “no” vote to show their disdain for President Trump. This could serve as a test of their loyalty to the GOP.
Most Americans, regardless of party affiliation, agree that tax reform is long overdue. The fact that this has become a “party survival” initiative is quite sad. The in-fighting of the Republicans and the absence of the entire Democratic party only hurts those they claim to protect: the American taxpayer. The already complicated tax code and the intricacies around each person’s filing situation are made more obscure by the nitpicking and mudslinging fear tactics of who will, or will not, benefit from this reform.
As a tax preparer for many years, the standard theme from my clients was that people want to keep as much of their hard-earned money as possible. Due to the complexity of the forms and the fear of not filing correctly, many people opt to pay a tax professional to prepare their returns. This bill would simplify things considerably.
Repealing the individual mandate gives Americans a choice of how they spend their money rather than being penalized for not purchasing something they may feel they do not need.
Stimulating the economy by lowering the corporate tax rate will add jobs and increase wages. Parents supporting kids who cannot find jobs, factory workers who have not had a pay increase in over a decade, and college graduates will all have better options when companies can compete to hire “the best.”
Some individuals may not benefit from the GOP tax bill, in whatever form it finally takes. No matter what you do, you can’t please everyone. So will we not make things better for those who are suffering the most unless it also benefits every single taxpayer? If in fact, this is the beginning and a “work-in-progress” that can be improved and tweaked over time, shouldn’t we abandon the typical “throw the baby out with the bathwater” mentality?
If the intention is to meet Presidents Trump’s desire to sign tax reform into law by the end of the year, there is a ton of work to get done. The GOP must rally the votes they need in the Senate, followed by reconciliation with the House in committee and finalizing the bill for the president to sign into law. For now, the big question remains. Will the Republicans make it happen? If they do not, the GOP will have plenty of other races to worry about next year.