Haste makes waste. The Republican leadership’s rewrite of the tax bill over lunch last Friday accidentally nullified all of their corporate donors’ favorite deductions. In their hurry to make sure nobody actually had time to read the bill before voting on it, the GOP Senate missed some important fine print.
This means plans for the House of Representatives to simply ratify the Senate version of the bill on Monday are out the window. Now, this legislation will have to go through a conference committee (to reconcile each chamber’s bills), adding two weeks to the process, and another vote in each chamber.
The Senate bill lowered the normal corporate tax rate from 35% to 20%. Unfortunately, as part of the process of making up for revenue lost through promises make to buy key Senators’ votes, the Alternative Minimum Tax (AMT) for corporations (which the GOP intended to abolish) was reinserted in the legislation at 20%.
While corporations could still claim a wide variety of tax credits and deductions, they are now worthless. Companies can either take no deductions and pay 20% — or take lots of deductions and pay 20%.
It didn’t take too long for the US Chamber of Commerce to notice the error and they are not amused.
Here’s one take, via the Wall Street Journal:
… Murray Energy Corp., an Ohio-based firm and the largest privately held U.S. coal-mining company, complained that the AMT decision and the Senate’s tougher limits on interest deductions made a “mockery out of so-called tax reform.” Robert Murray, the company’s chief executive officer, said the Senate tax plan would raise his company’s tax bill by $60 million.
“What the Senate did, in their befuddled mess, is drove me out of business and then bragged about the fact that they got some tax reform passed,” Mr. Murray said in an interview Sunday. “This is not job creation. This is not stimulating income. This is driving a whole sector of our community into nonexistence.”
Republicans are now faced with finding more revenue so they can once again eliminate the corporate AMT. This means some of the more odious revenue sources not making it into the Senate bill, like the tax on graduate student tuition will have to be restored to the final version of the bill.
Get ready for more ooops! moments as the bill actually gets read. Now I’m hearing the promises made to Senators Collins (Obamacare funding) and Flake (DACA consideration) have already been broken.
And like that, House conservative say they have no plans to accept the compromises that Collins and Flake secured in exchange for their tax bill votes. https://t.co/NXcCjHV9nF
— Sam Stein (@samstein) December 5, 2017
Who knows where this will end up? The way the Senate’s been breaking rules lately, anything is possible.
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