By Gina Loudon, ,
Published November 12, 2017
Leave it to the Senate to take a flaming hot Trump economy and throw swamp water on it! The booming stock market speaks for itself. President Trump has our economy rolling and now the Senate comes along with "business as usual" tactics to mess things up. Free-market lovers will never stand for this!
The version of tax reform legislation unveiled by Senate Republicans on Thursday is another indication that the swamp is alive and well. This is a repeat performance of the failure of Congress to get health care done.
The Senate GOP has proposed a version of the tax bill that delays the corporate tax rate reduction from 35 percent to 20 percent until 2019 – contrary to the version supported by House Republicans that would create that desperately needed economic stimulus tax rate cut in 2018.
Effectively, the Senate tax bill calls for a slightly lower top tax rate for individuals of 38.5 percent, versus the 39.6 percent in the House bill. The Senate measure also would double the estate tax exemption, but not repeal the tax, as House Republicans proposed.
The Senate version keeps the deduction for medical expenses, while the House bill eliminates it.
The duration of real estate depreciation will be reduced from 39 years to 25 years. This initiative alone will create another real estate asset bubble like the 1980s, where the rush to invest in real estate was not matched with economic demand. This in turn created a supply-side bubble – not enough tenants to fill the buildings and a subsequent mortgage default, followed by the savings and loan crisis.
The scoring of the proposed Senate tax bill shows this will cost the federal government $5.8 trillion in reduced revenue over 10 years, adding to the national debt.
The controversy surrounding the blue states state and local tax deduction is also eliminated entirely in the Senate bill. This is contrary to the deal the House put forth after bending to pressure from Republicans from New York, New Jersey, Illinois and California, who raised concerns about losing that deduction for their constituents.
Once again, House Speaker Paul Ryan, R-Wis., capitulated to the needs of a few American taxpayers. Once again, the special interests win, not the American voter.
The inability of Republicans in Congress to come to a consensus on a tax bill is reflective of their “repeal and replace” fail during the healthcare bill negotiations.
The increasing pressure to deliver a bill the President Trump can sign illustrates just how purposeful Congress is at enabling gridlock. Congress fails to understand that the voter is engaged and is already mobilizing and supporting candidates for the 2018 election cycle who support the president’s agenda.
Another failure to deliver a bill that President Trump campaigned for will only result in support for Steve Bannon’s rallying cry for a war on the GOP establishment.
President Trump has done an amazing job of growing our economy. Americans were promised cuts that will stimulate economy, tax simplification (the Senate bill is seven layers high!), and equality (the bracketed differences are socialist, not free market!).
My guess is that those who fought so hard to elect President Trump will NOT let the swamp get away with this!