WASHINGTON — Senate Republicans revealed its tax overhaul plan Thursday, with some lawmakers urging their Democratic colleagues to join them in passing legislation to change the country’s tax system.
The Senate version of the Tax Cuts and Job Act was announced the same day the House Ways and Means Committee approved its measure, which members introduced last week.
The Senate plan would maintain the current seven tax brackets, though with a proposed reform of rate structures with a 38.5 percent bracket of high-income individuals and expansion of the zero individual tax bracket. The child tax credit would increase from $1,000 to $1,650. The adoption tax credit would also be maintained, which was not included in the original House bill.
The corporate tax rate would decrease from the current rate of 35 percent to 20 percent, but unlike the House bill this wouldn’t go into effect until 2019. Some “pass-through” income would be subject to a 17.4 percent deduction.
State and local tax deductions would be fully repealed in the Senate proposal, though medical expense and student loan deductions would remain, which are not in the House version. While the House bill would double the estate tax before its elimination in 2024, the Senate plan would retain it while doubling the exemption from $5 million to $10 million.
“We have been laser focused, Mr. President, on reducing classes for the middle class, and that is exactly what this will do,” Senate Finance Committee Chair Orrin Hatch, R-Utah, said on the Senate floor.
“Combined, these changes with the broken tax code in the chairman’s mark will give hard-working taxpayers in the country bigger paychecks and more opportunities. They will grow our economy, raising wages and improving our standard of living for all Americans.”
Sen. Shelley Moore Capito, R-W.Va., said in a statement this was an important step in delivering tax reform.
“For West Virginians and so many Americans across the country, the status quo just isn’t working, and this is our opportunity to change it,” she said. “That’s why we are working to provide relief for working families, help small businesses expand and succeed, and spark the kind of growth that can truly transform our economy.”
Hatch also said it is time for Democrats and those on the fence to help draft and pass legislation.
“We have a historic opportunity to help, and that opportunity should not be squandered by anyone on any side of the aisle for cheap political points,” he said.
Senate Minority Leader Chuck Schumer, D-N.Y., said the Senate and House GOP plans are similar in that they benefit the wealthy over middle-class Americans, adding Republicans lose no matter if a plan becomes law or fails.
“There is only one good path out for them: work with us on a good bill,” he said.
West Virginia Democratic Sen. Joe Manchin told reporters Wednesday he wants a plan that benefits the middle class.
“They’re looking for relief, and temporary relief is not going to be sufficient, and all the additional debt that we might be incurring that’s going to the protection of those millionaires and billionaires and gazillionaires,” he said.
A Thursday request to Manchin for a comment was not answered.
“As the proposal continues to move forward through an open and transparent process and comes to the Senate floor, I encourage my Democrat colleagues to put aside their misguided rhetoric; stop the political theatrics; and join President Trump, Republicans in Congress, and the majority of Americans who want a better tax system,” Capito said. “The train is leaving the station. It’s time to get on board.”
The House Ways and Means Committee passed its version of the Tax Cuts and Jobs Act in a 24-16 vote, which included an amendment to preserve the adoption tax credit. The measure would also merge the seven tax brackets into four, with rates ranging from 12 percent to 39.6 percent.
The House is expected to vote on its plan next week.
The Senate can pass the tax measure with a simple majority, meaning two of the 52 Republican senators can vote against a bill with Vice President Mike Pence breaking a tie. If the measure would increase the deficit beyond 10 fiscal years, however, it would require 60 lawmakers to pass because of the Byrd rule, named after late West Virginia Sen. Robert Byrd.
Senate Majority Whip John Cornyn, R-Texas, said a vote on the Senate plan will most likely happen after Thanksgiving. President Donald Trump said last week he wanted a bill on his desk by Thanksgiving.