On Friday, U.S. Senate Republicans will struggle with the option of adding a tax increase to comprehensive legislation that was meant to cut taxes on businesses and individuals, seeking support from conservatives concerned about the influence on the federal deficit. Republican lawmakers could move to a final vote later in the day following a procedural vote that begins at 11 a.m. EST.
Since taking office, President Donald Trump and the Republican-led Congress not passed a major legislation. Their bill would be the largest change to the U.S. tax system since the 1980s. Republicans were scrambling how to generate $350 billion or more in taxes over a ten-year period to avoid their legislation from increasing the federal deficit, if the proposed cuts don’t go as planned.
Senate Republican leader Mitch McConnell along with others are seeking support from party members for improved tax breaks for non-corporate pass-through businesses, a larger child tax credit for families, and a $10,000 deduction for state and local property taxes. Republicans are hopeful that the bill could be approved this week with a final agreement made this month by the House.
On Thursday, Republicans recognized that the Senate rules would not allow the later generation of a of tax increase, if the bill fails to advance the economy producing enough revenue to pay for tax cuts. The nonpartisan Joint Committee on Taxation published a report indicating the legislation would add $1 trillion to the deficit over the next 10 years, despite the tax-driven economic growth projections.
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Senator Bob Corker along with other Republicans are concerned about the deficit impact had required a trigger in exchange for their support of the bill. “We have an alternative, frankly a tax increase we don’t want to do, to try and address Senator Corker’s concerns,” said Senate Majority Whip John Cornyn.
The bill would reduce the U.S. corporate tax rate to 20 percent from 35 percent after a one-year delay and decrease the tax burden on businesses and individuals, but it also ends numerous tax breaks. Democrats are unified in their opposition to the bill.