The biggest problem with the current Republican tax bill isn’t that it’s a massive giveaway to wealthy people and wealthier corporations, it’s that it’s such a massive giveaway to wealthy people and wealthier companies that Democrats might actually get to vote on it.
On Thursday, Senate Republicans released a tax cut plan that closely tracks the business-friendly bill introduced last week in the House. But that bill has little chance of becoming law in its current form thanks to a Senate rule that requires 60 votes for legislation that adds to the deficit beyond 10 years.
Both the House and the Senate bills have added weight as they’ve worked through the process—and always in the direction of giving more breaks to the top 1 percent. The result is that neither of the bills as they now stand can make it through the Senate without picking up at least six Democratic votes on top of every Republican vote. Which is a very unlikely outcome for the current bill.
In the past five days, three different studies have found that the House bill would provide nearly half of its benefits to the top 1 percent of Americans, while raising taxes on tens of millions of middle-class families. The Senate bill generally sticks to that approach.
The Senate bill does differ from the House bill in particulars. The House bill chops more of the home mortgage deduction, while the Senate bill keeps that deduction—a spot where Republicans know they’re particularly susceptible to attack. To make up the difference, the Senate bill simply takes even more from blue-state residents.
To offset the cost of keeping those deductions, Senate Republicans want to completely repeal the deduction for state and local taxes, instead of keeping it for up to $10,000 of property taxes.
Because Republicans are more than willing to burn those states for a corporate tax break. But it’s still not enough.
Republicans continue to talk about repealing deduction of state and local taxes as if it’s a good thing. They’re working hard to sell the idea that dropping this deduction will put pressure on blue states to lower their taxes … because what would really make New England great would be if it had the same level of educational investment as Mississippi.
A handful of red states are able to mock success by hiding their tax burden on extraction industries—primarily oil and coal—but the rest are utterly dependent on the support of blue states who pay far more into the federal pot than they get out. Republicans aren’t blind to that. Removing the state and local tax deduction will mean that blue states pay even more to support red states, while getting back even less.
But so long as Republicans can’t agree on how to get their bill to the point where it can meet the “Byrd Rule” which would allow it to slide through without Democratic support, the odds that it will pass are vanishingly small.
House Republicans are not even close to complying with the Byrd rule. On Monday, the University of Pennsylvania’s Wharton business school projected that their bill would add $2.6 trillion of deficit spending between 2028 and 2040. The Senate may not be in much better shape.
The big problem is that the thing Republicans are most dead set on doing—dropping the corporate tax rate—is also the thing that directly impacts the deficit to such a degree that no matter how hard they shake middle and working class Americans to make up the difference, there’s just not enough money to be found.
Democratic Senator Chuck Schumer earlier this week declared the Republican tax effort a “lose-lose” situation for the GOP. If they fail to pass a bill, their well-earned reputation for being unable to govern would be confirmed. If they do pass a bill, their equally established willingness to hurt most Americans to reward their billionaire supporters would also be obvious.
Right now, Republicans look set to lose.