Sens. Marco Rubio (R-FL) and Mike Lee (R-UT) introduced an amendment to the Senate tax bill on Wednesday that would help provide a bit more relief for middle class families in a tax bill that currently doesn’t do much to help them. President Trump, however, reportedly opposes it.
Under the current proposed Senate tax bill, the child tax credit is expanded to $2,000, but isn’t refundable. This means that lower-income families who don’t make enough for income taxes and instead pay only payroll taxes wouldn’t qualify for the full tax credit, with many only receiving an additional $75 per child annually. The Rubio-Lee amendment would change that by making the tax credit refundable.
According to Chye-Ching Huang, deputy director of federal tax policy at the nonpartisan Center on Budget and Policy Priorities, the Rubio-Lee amendment would cost roughly $70 billion; to offset that cost, the two Republican senators have suggested a slightly higher 22 percent corporate tax rate, rather than the current 20 percent rate.
Trump, however, is adamant that the bill keep its original 20 percent corporate tax rate, which he called a “big, beautiful Christmas present” for the American people at an event in early November. According to Bloomberg’s Margaret Talev, the president is opposed to the Rubio child tax credit plan, with a White House official reaffirming the administration’s dedication to the 20% corporate rate on Wednesday.
New: Trump OPPOSES Marco Rubio’s child tax credit plan, White House official tells @margarettalev.
Rubio wants to pay for child tax credit by setting corporate rate at 22% instead of 20%.
— Jennifer Jacobs (@JenniferJJacobs) November 29, 2017
Trump isn’t alone. Much of the GOP has made clear that the 20 percent corporate tax rate is non-negotiable, which leaves little room for senators like Rubio and Lee to propose fixes that would actually help middle class families.
In both the White House and GOP’s view, a lower corporate tax rate means more jobs, higher wages, and — theoretically — a $4,000 pay raise for each American family, despite the fact that this theory has historically been proven to be inaccurate and untrue. Details like making the child tax credit refundable are simply background noise.
On Wednesday afternoon, Republicans proved their determination to maintain that corporate handout: the Senate voted 52-48 along party lines on a motion to proceed to a floor debate on the bill.
Republicans still have plenty of crucial details of the plan to hammer out, including how they plan to pay for the majority of new provisions they included in the bill to win votes from on-the-fence senators like Susan Collins (R-ME) and Bob Corker (R-TN). But for now, given Trump’s stance on the Rubio-Lee amendment, it’s unlikely that the measure will be one that wins many legislators over in the end.
On Wednesday night, the non-partisan Joint Committee on Taxation released its dynamic scoring of the Senate bill. That analysis found that the “giant tax cut” Republicans promised to middle class families would instead do relatively little for them.
New estimates: Senate tax plan would *raise* taxes on or leave out 156 million households (84%) by 2027, according to nonpartisan official estimators JCT. pic.twitter.com/2QrXsM4cmg
— Lily Batchelder (@lilybatch) November 30, 2017
The JCT report showed only 62 percent of Americans would get a tax cut worth $100 or more in 2019 under the Senate plan; the remaining 38 percent would pay either the same amount in taxes or see their taxes rise (those earning $50,000 to $75,000 would see a tax hike of $100 or more, the analysis showed). This dynamic scoring doesn’t even include the potential damage that higher premiums and lower Medicaid enrollment included in the tax bill might cause. (The GOP Senate bill would raise ACA premiums to $2,000 in 2019.)
So much for that “big, beautiful Christmas present.”