Putting a Bow on Tax Reform for Christmas
If there’s one thing Republicans are anxious to wrap up this Christmas, it’s tax reform! And thanks to a late-night Senate compromise, hopes are high that the GOP will do exactly that.
Although it was well after 2 a.m. when Majority Leader Mitch McConnell (R-Ky.) turned off the lights, relief outweighed fatigue when his party finally passed a sweeping overhaul of the country’s tax code, 51-49. After plenty of sleepless nights for GOP leaders, in the end, only retiring Senator Bob Corker (R-Tenn.) voted against the 479-page bill – giving Republicans the tiny cushion they needed to move what could be the biggest tax reform in 30 years.
For families, who’ve been crushed under the weight of the IRS, the vote was certainly something to cheer about. Finally, Congress is on the verge of doing away with the marriage penalties — a goal of FRC’s for decades. Then, in a boost to a concept FRC first developed, the Senate not only kept the House’s bump in the child tax credit — but increased it — giving parents back some of their hard-earned money. We were disappointed that Senator Steve Daines’s (R-Mt.) idea to give unborn children a tax credit never materialized, along with the House’s push to give pregnant parents the opportunity to start planning for their future kids with the 529 education savings accounts. But unfortunately, those are the natural casualties of the reconciliation process. Unlike the House, which has a lot more freedom to think creatively, McConnell’s party had to work within the tight confines of the budget rules. In both instances, Republicans would have to prove to the parliamentarian that the concepts weren’t overly policy-driven. In the end, it proved too much of a struggle, and they dropped both.
Senator Ted Cruz (R-Texas) did manage to salvage some great news on the 529 front by letting homeschooling families take advantage of the program. That in itself was a huge victory for millions of moms and dads who deserve the right to educate their kids the way they see fit.
“As part of this historic effort,” he explained, “we’ve also invested in our children and expanded educational opportunities with the expansion of 529s to include K-12 elementary and secondary school tuition, including educational expenses for homeschool students. By expanding choice for parents and opportunities for children, we have prioritized the education of the next generation of Americans, allowing families to save and prepare for their children’s future educational expenses. Expanding 529s ensures that each child receives an education that meets their individual needs, instead of being forced into a one-size-fits-all approach to education, or limited to their zip code.”
Now, the real work begins. Because of the Senate’s strict rules and much narrower majority, the end result was noticeably different from the House’s bill. That could tee up some tense negotiations in conference, where Speaker Paul Ryan (R-Wisc.) and McConnell will have to keep their fragile coalition together long enough to vote on a final version. The sticking points are major in spots: from the number of tax brackets (the House’s four to the Senate’s seven) to McConnell’s repeal of the Obamacare individual mandate. Obviously, members of the conference team will have their hands full ironing out the wrinkles in tax reform’s next chapter.
For conservatives, there’s also missing Free Speech Fairness Act language in the Senate bill, which would roll back the unpopular Johnson Amendment and finally stop the IRS’s half-century campaign of intimidation against churches and nonprofits. There’s also the charitable deduction crisis, which, if unresolved, could devastate the culture of giving in America. The Heritage Foundation does a great job of summing up the bills’ differences here, but the overall message is simple: for the legislation to succeed, Republicans are going to have to find some common ground — and soon.
They’ll also have to overcome the Left’s misinformation campaign, which the liberal media is all too eager to parrot. For weeks, they’ve been calling the bills an attack on the poor and a reward for the rich. Neither is true, as the government’s own studies point out. Everyone (including the less fortunate) benefit from the cuts, the Joint Committee on Taxation points out. And 137 economists agree. In an open letter to Congress, they explain that the reforms would lead to “to more jobs, higher wages, and a better standard of living for the American people.”
If the bill favors the rich, McConnell says, you could’ve fooled them. “Most of the wealthy people I run into don’t think they’re getting anything. I haven’t run into anybody during this tax discussion who is very successful who thinks they are benefiting from it.” That’s about to change, thanks to the opening bell on this morning’s stock exchange. If there’s one place that’s very fond of Congress’s legislation, it’s Wall Street. The Dow Jones closed on another record high (its 64th this year) thanks to the optimism about the tax package.
Let’s hope the Republicans sent to conference can patch their differences long enough to send their own stock soaring.
Until then, President Trump encouraged, “We are one step closer to delivering MASSIVE tax cuts for working families across America. Look forward to signing a final bill before Christmas!”
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