House votes to make individual tax cuts permanent

0
901

The House on Friday passed a bill to permanently extend tax cuts for individuals and unincorporated businesses included in the recent GOP tax overhaul, even though not much more is expected of the measure legislatively.

The Senate has no plans to take it up. But backers in the House, who are exiting Washington for an extended recess of some six weeks before November’s midterm election, believe it will deliver for them politically. Polls show scant public support overall for the GOP tax cuts that took effect Jan. 1. But Republican voters overwhelmingly favor them, the polls also show.

“I think it’s important we make that tax relief permanent for middle-class families and Main Street America,” said Ways and Means Chairman Kevin Brady (R-Texas).

The lower tax rates are generally set to expire at the end of 2025 because of budget constraints tied to the process Republicans used to pass last year’s more sweeping tax overhaul. Some other provisions expire even sooner under the new law, which permanently slashed the corporate tax rate to 21 percent from 35 percent.

The fact that the corporate cut was permanent while the cuts for individuals were temporary was a major attack line by Democrats during last year’s debate over the tax overhaul, which passed with zero Democratic support.

The follow-on bill for individual permanence includes cementing a 20-percent deduction on income from non-corporate businesses called pass-throughs. It passed 220-191, largely along party lines.

Three Democrats voted in favor: Reps. Conor Lamb of Pennsylvania, who is running in a newly configured district; Jacky Rosen of Nevada, who is running for the Senate against incumbent Republican Dean Heller; and Kyrsten Sinema of Arizona, who is locked in a tight race for the Senate seat of retiring Republican Jeff Flake.

A handful of GOP members from high-tax states such as New York and New Jersey voted against the bill, in opposition to the $10,000 limit on federal deductions for state and local taxes. That cap would be made permanent under the bill, forcing two of Brady’s Ways and Means colleagues with high-tax constituencies, Reps. Peter Roskam (R-Ill.) and Erik Paulsen (R-Minn.), to cast difficult votes in favor of the legislation. Both are running for reelection in competitive districts.

The House bill has hardly galvanized Senate Republicans.

Don’t expect any hearings or markups, said Sen. Pat Roberts (R-Kan.), a Senate Finance Committee member.

[Read More]