Senator Johnson says he'll vote against tax bill

Odds of passing a Senate tax reform bill just became a little longer as Senator Ron Johnson said he would vote against it.

Johnson's opposition means that the Republican Senate can afford just one more defection or the legislation would be doomed.

ABC News:

Republicans controlling the Senate 52-48 can approve the legislation with just 50 votes, plus tie-breaking support from Vice President Mike Pence. With solid Democratic opposition likely, they can lose just two GOP votes.

Besides Johnson, Republican Sens. Susan Collins of Maine, Jeff Flake of Arizona and Bob Corker of Tennessee have yet to commit to backing the tax measure.

Johnson complained the bills were more generous to publicly traded corporations than to so-called pass-through entities. Those are millions of partnerships and specially organized corporations whose owners pay levies using individual, not corporate, tax rates. While details of the House and Senate bills differ, many pass-through owners would owe more than 20 percent in taxes for much of their income.

"These businesses truly are the engines of innovation and job creation throughout our economy, and they should not be left behind," Johnson said. But he left the door open to changes "so I can support the final version."

A small group of House Republicans largely from New York and New Jersey was rebelling because the House plan would erase tax deductions for state and local income and sales taxes and limit property tax deductions to $10,000.

Their numbers seemed insufficient to derail the bill. Asked if they could stop it, Rep. Peter King, R-N.Y., shook his head and said, "I don't think so."

Repealing the "Obamacare" individual mandate would save $338 billion over the coming decade because fewer people would be pressured into getting government-paid coverage like Medicaid. Senate Finance Committee Chairman Orrin Hatch, R-Utah, used the savings to make his bill's personal tax reductions modestly more generous.

Ending the bill's personal income tax cuts in 2026, derided by Democrats as a gimmick, was designed to pare the bill's long-term costs. Legislation cannot boost budget deficits after 10 years if it is to qualify for Senate procedures barring bill-killing filibusters. Those delays take 60 votes to block, numbers Republicans lack.

Johnson's defection was not unexpected. He had been championing pass throughs for weeks. As for the rest of the GOP caucus, it appears that budget and deficit hawks have resigned themselves to passing some kind of reform bill that will add substantially to the deficit over the next decade. The problem is with Flake and Corker (we can assume Collins is a "no"). Both Senators have it in for Trump and both are retiring. Either or both would take great personal pleasure in derailing tax reform in the Senate if it reflected badly on Trump.

The key then is for McConnell and the rest of the leadership to appeal to their loyalty to party. A failure of tax reform in the Senate would make a Democratic takeover in the House more likely and might even put the Senate in play. It's all McConnell has at the moment, unless the whole thing falls apart over some other issue like repealing the deduction on state taxes, or even getting rid of Obamacare's individual mandate.

Unless Senator McConnell demonstrates heretofore hidden leadership skills over the next few weeks, the Senate is not going to approve any tax reform bill. 

 

Odds of passing a Senate tax reform bill just became a little longer as Senator Ron Johnson said he would vote against it.

Johnson's opposition means that the Republican Senate can afford just one more defection or the legislation would be doomed.

ABC News:

Republicans controlling the Senate 52-48 can approve the legislation with just 50 votes, plus tie-breaking support from Vice President Mike Pence. With solid Democratic opposition likely, they can lose just two GOP votes.

Besides Johnson, Republican Sens. Susan Collins of Maine, Jeff Flake of Arizona and Bob Corker of Tennessee have yet to commit to backing the tax measure.

Johnson complained the bills were more generous to publicly traded corporations than to so-called pass-through entities. Those are millions of partnerships and specially organized corporations whose owners pay levies using individual, not corporate, tax rates. While details of the House and Senate bills differ, many pass-through owners would owe more than 20 percent in taxes for much of their income.

"These businesses truly are the engines of innovation and job creation throughout our economy, and they should not be left behind," Johnson said. But he left the door open to changes "so I can support the final version."

A small group of House Republicans largely from New York and New Jersey was rebelling because the House plan would erase tax deductions for state and local income and sales taxes and limit property tax deductions to $10,000.

Their numbers seemed insufficient to derail the bill. Asked if they could stop it, Rep. Peter King, R-N.Y., shook his head and said, "I don't think so."

Repealing the "Obamacare" individual mandate would save $338 billion over the coming decade because fewer people would be pressured into getting government-paid coverage like Medicaid. Senate Finance Committee Chairman Orrin Hatch, R-Utah, used the savings to make his bill's personal tax reductions modestly more generous.

Ending the bill's personal income tax cuts in 2026, derided by Democrats as a gimmick, was designed to pare the bill's long-term costs. Legislation cannot boost budget deficits after 10 years if it is to qualify for Senate procedures barring bill-killing filibusters. Those delays take 60 votes to block, numbers Republicans lack.

Johnson's defection was not unexpected. He had been championing pass throughs for weeks. As for the rest of the GOP caucus, it appears that budget and deficit hawks have resigned themselves to passing some kind of reform bill that will add substantially to the deficit over the next decade. The problem is with Flake and Corker (we can assume Collins is a "no"). Both Senators have it in for Trump and both are retiring. Either or both would take great personal pleasure in derailing tax reform in the Senate if it reflected badly on Trump.

The key then is for McConnell and the rest of the leadership to appeal to their loyalty to party. A failure of tax reform in the Senate would make a Democratic takeover in the House more likely and might even put the Senate in play. It's all McConnell has at the moment, unless the whole thing falls apart over some other issue like repealing the deduction on state taxes, or even getting rid of Obamacare's individual mandate.

Unless Senator McConnell demonstrates heretofore hidden leadership skills over the next few weeks, the Senate is not going to approve any tax reform bill. 

 

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