Congress Strikes A Deal
House and Senate Republicans have reached an agreement on the largest tax overhaul in over 30 years. Congress votes on the final draft next week, resulting after Republicans from both parts of Congress debating for weeks on several points of the tax bill. Apart from the corporate tax cut and Obamacare repeal, not many other details have been revealed about the bill. However, the bill is already controversial, as Democrats remain heavy critics of the bill. A large amount of polled public also expressed dissatisfaction with the bill, which is biased to favour the upper echelons.
Corporate Tax Cut
Congress agrees on 21% for the new tax reduction in the corporate sector. The current rate sits at 35%.
The reason the tax cut is 21% and not the previously proposed 20% is because 21% allows tax writers to make the cuts immediate. In turn, this will give Republicans a bit of financial strength as companies will praise the immediacy of the cut.
The new top income tax rate is now at 37%, while the current rate sits at 39.6%. This is what is causing Democrats to criticize Republicans; they are offering a tax cut to the already wealthy, and leaving the middle class to fend for themselves.
Republican member as well as longest serving Senate member Orrin Hatch said to reporters,
“I think we’ve got a pretty good deal,” (Reuters).
He did not determine, however, for whom it was a good deal.
The dreaded scrap of the Obamacare mandate that requires Americans to purchase insurance or pay a fine has been scrapped in the new tax plan. This is because the Republicans hold a steadfast vengeance against Obamacare. Including such a provision in the tax bill is done under the pretense of ‘saving Americans’ money.’ In reality, all it will do is leave more Americans uninsured and raise premiums by 10%.
This is not a total defeat of the Obamacare health law, but a substantial injury. This provision became key in the negotiations of the agreement between Senate and House in recent days.
It is no news that the Trump administration is failing in public opinion polls, ranking only at 37%. It is also failing in Congress as well. While Congress remains overwhelmingly Republican, there are Republicans who are beginning to doubt the administration. Mid-elections are due in 2018; Trump is desperate to make a big splash.
“If Congress sends me a bill before Christmas, the IRS … has just confirmed that Americans will see lower taxes and bigger paychecks beginning in February,” he said (Reuters).
Like a high school popularity contest gone wrong, Trump is the class president who is trying to make good on his promise ‘to have more parties.’
We are only able to infer so much, as we eagerly await the final votes which could commence as soon as Friday December 14th.
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