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Senate Republican leadership will need to convince lawmakers that tax cuts will largely pay for themselves through economic growth after a Budget Committee report shows that the plan will add to the deficit using conventional scoring methods.
Tax revenue will fall nearly 28 percent if Republican tax cuts are enacted, according to projections from the Congressional Budget Office. Republican senators including Mike Lee (Utah), Bob Corker (Tenn.), Ted Cruz (Texas), and Marco Rubio (Fla.) have said they don’t want to back a plan that adds heavily to the deficit.
The Senate Budget Committee report instructs the CBO to use dynamic scoring—which takes macroeconomic effects into account—when scoring tax legislation. But it says the estimates “will be used for informational purposes only.”
White House officials have been criticized for relying on unrealistic economic growth numbers when selling the tax plan. While dynamic scoring shows a smaller deficit over time, it means fiscally conservative lawmakers will need to trust that calculation in order to support the budget.
The Senate could vote on the budget resolution as early as this week. The House passed its version Oct. 5. The two chambers must agree on a final version before they can use it to advance tax reform, which they hope to pass by the end of the year.
The U.S. Conference of Mayors is approaching congressional members during recess this week to press for preservation of the federal deduction for taxes paid to local and state governments.
“We have an ongoing campaign with key Republican lawmakers,” Tom Cochran, CEO and executive director of the U.S. Conference of Mayors, said Oct. 16 during a conference call with reporters.
“Silently, this week, mayors are talking to members of Congress back home,” he said. “You can’t really judge what people are saying, but how they vote.”
The mayors aren’t alone, Cochran said. Realtors, firefighters, governors, and school superintendents, “who know how to head count,” are also campaigning for preserving the deduction.
The Republican tax framework, released Sept. 27, would eliminate many deductions for individuals, including the break for state and local taxes.
Republicans could buy 325 million Shetland ponies if they gave up on the idea of repealing the estate tax and making other cuts that benefit the wealthy, according to an Oct. 16 report from TalkPoverty.org. The savings President Donald Trump’s adult children could receive from the repeal of the estate tax alone would buy 1.4 million ponies.
Caring for an average pony costs $44,800 over 10 years. The Senate is planning to vote on a budget this week that costs at least $1.5 trillion over 10 years in tax cuts.
“Of course, average Americans will miss out on the pleasure of ponies,” the report said. The Tax Policy Center estimates 80 percent of the tax cuts in the Republican plan benefit the top 1 percent. Republicans have vowed to help the middle class in tax reform and have derided the report.
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