GOP Tax Plan: Individual Cuts Are Temporary

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The Senate Republicans' updated tax plan would temporarily reduce taxes for individuals while permanently slashing the corporate tax rate. The legislation would also repeal the Affordable Care Act's individual mandate to help offset losses in federal revenue. Democrats have blasted the revised plan as a lopsided handout to big business.

On Nov. 13, Republican Senate Finance Committee Chair Sen. Orrin Hatch of Utah disclosed that the GOP tax bill would not be able to pass in the chamber because it would add to the federal deficit beyond a 10-year period. Hatch pledged to change the bill to make it more feasible.

"We are, of course, aware of this problem and are working to ensure that the reduced rates and additional reforms designed to bring back investment back to the United States and create more American jobs remain in place past the 10-year budget window," Hatch said, according to Business Insider.

On Nov. 14, Hatch unveiled alterations to the tax plan, known as the Tax Cuts and Jobs Act. The updated legislation would allow individual tax cuts to expire after 2025 while continuing a reducing corporate taxes indefinitely. It would also repeal the ACA's individual mandate, The Washington Post reports.

Senate Republicans are attempting to pass their tax plan through budget reconciliation, a legislative procedure that only requires a simple majority and would not require any support from Senate Democrats. Under reconciliation, the TCJA is only allowed to increase the federal deficit by $1.5 trillion over a decade.

On Nov. 15, Senate Democrats blasted Hatch's changes to the TCJA, asserting that it would harm the middle class while benefiting corporations and the wealthy.

"Why do people think this is a swamp?" said Democratic Sen. Mark Warner of Virginia. "This is Swamp 101."

Treasury Secretary Steven Mnuchin dismissed concerns about how Americans would perceive the temporary cuts to individual taxes, stating that the cuts could be extended later.

"I think people understand that we'll fix the personal side," Mnuchin said during a meeting with members of Congress.

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Senate Republicans hold 52 seats in the chamber and need 51 votes to pass the TCJA through budget reconciliation. GOP Sen. Ron Johnson said that he would not support the bill as it is currently written.

"If they can pass it without me, let them," Johnson said, explaining that he believed the bill would benefit corporations at the expense of small businesses. "I'm not going to vote for this tax package."

On Nov. 8, the Congressional Budget Office estimated that repealing the ACA's individual mandate would result in 13 million fewer Americans having health care coverage by 2027. The CBO score also estimated that premiums would rise by an average 10 percent each year, CNN Money reports.

On Nov. 15, a Quinnipiac University poll found that 25 percent of registered voters approved of the House and Senate Republicans' tax plans while 52 percent disapproved. The survey was conducted before Hatch introduced his changes to the TCJA, CNBC reports.

The poll also found 61 percent of respondents believed the tax plans would primarily benefit the rich, while 59 percent said it would hurt the middle class. Only 36 percent were confident that the tax packages would create new jobs and promote economic growth.

Sources: Business Insider, CNBCCNN Money, The Washington Post / Featured Image: Gage Skidmore/Flickr / Embedded Images: U.S. Congress via Wikimedia Commons, The White House/Flickr

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