"A Potential Nightmare Scenario For The GOP": Tax Vote Delayed To Friday; May Include $350BN In New Tax Hikes

Tyler Durden's picture

Update: The Senate tax plan roll vall vote which was widely expected to take place on Thursday evening, has been pushed back to 11am on Friday following the collapse of the "Trigger" compromise (discussed below) to win a majority for a Senate tax overhaul left Republicans scrambling to salvage the legislation, Bloomberg reports. While debate over the bill may continue into the evening, McConnell said. It’s unclear when the unlimited amendment vote series known as “vote-a-rama” would begin.

"For the information of all senators, the Senate will continue to debate the bill tonight. The next roll call votes will be at 11 a.m tomorrow morning," Mitch McConnell announced Thursday night. The decision to skip a late-night session came as deficit hawks, led by Bob Corker pushed for a guarantee that the Senate tax legislation won't increase the deficit. In its current format an analysis released late on Thursday found tax reform would cost $1 trillion.

As Bloomberg explains:

"the day’s events left GOP leaders contemplating a variety of potentially unpalatable measures -- including making some tax cuts on the individual and corporate side end within six or seven years. The current version of the Senate bill would sunset individual breaks in 2026."

And the punchline: "It’s a potential nightmare scenario for Republicans, who have been counting on a tax overhaul to be their first major legislative accomplishment of the year. The party is under enormous pressure to complete the tax measure with less than a year to go before the mid-term elections and with wealthy donors and large corporations demanding tax rate cuts."

* * *

Following a report from the Joint Committee on Taxation, which unveiled late on Thursday afternoon that the Senate Tax bill would generate enough economic growth to lower its $1.4 trillion revenue cost by only about $458 billion over a decade - in other words it would still boost the deficit by roughly $1 trillion - in a dramatic showdown on the Senate floor, GOP leaders agreed to effectively increase taxes by $350 billion in response to a procedural ambush by deficit hawks led by Sen. Bob Corker that nearly killed the GOP tax reform bill.

According to Bloomberg, Senator David Perdue, a Georgia Republican, said that GOP Senators are "discussing a new compromise for their planned tax overhaul that would increase taxes in future years."


David Perdue

Quoted by The Hill, Senate Republican Whip John Cornyn told reporters after a round of intense discussions on the floor, “we have an alternative, frankly, tax increase we don’t want to do to try to address Sen. Corker’s concerns.”  Cornyn said the details of the proposal are being worked out.

Corker had insisted on a "trigger" proposal that would have rolled back tax relief in case economic projections fell short of expectations; the flipside is that it would have also made any recession in the near future far worse by staggering tax increases just as the economy slowed down, in the process sending the deficit soaring and accelerating the economic contraction.

And in an unexpected, 11th hour reversal, the Senate parliamentarian ruled Tuesday afternoon that the trigger would not pass procedural muster. “It doesn’t look like the trigger’s going to work according to the parliamentarian,” Cornyn said. Cornyn’s remarks came after an hourlong standoff on the Senate floor in which three Republicans - Corker, Ron Johnson and Jeff Flake - held up a procedural vote that would have sent the measure back to the Senate Finance Committee.

At least two of those members, senators Bob Corker of Tennessee and Jeff Flake of Arizona, had backed the trigger concept in recent days. Corker The deficit hawks threatened to vote for a motion to recommit the tax bill back to the Finance Committee. That move would have put the legislation in limbo for the foreseeable future and scuttled an all-night voting session on tax relief.

As The Hill adds, Republican leaders appeared extremely frustrated with Corker, Flake and Johnson during their intense discussions on Thursday night while the fate of the bill teetered in the balance.

McConnell’s face grew flushed as he huddled with Corker and Sen. Pat Toomey (R-Pa.), one of the main architects of the tax reform bill, while GOP colleagues crowded around them to listen in. Johnson said he joined Corker’s rebellion so he could win an assurance from GOP leaders about getting a vote on setting the corporate tax rate above the 20-percent level favored by President Trump.

Ultimately the hawks allowed the floor debate to continue, but it’s unclear whether or how their demands might be met. Meanwhile, Senator David Perdue said the estimated tax increase would be $350 billion over a decade. Cornyn told reporters that the size could be even larger. Senator Ron Johnson of Wisconsin said he held out as well, to ensure he can offer amendments, including one to raise the pass-through deduction to about 25%, paid for by eliminating the corporate deduction for state and local taxes.

Quoted by Bloomberg, Johnson said he doesn’t know if senators will finish the bill Thursday night. “We just saw a kink in the time plan right there so who knows what other cogs might be put in this wheel,” he said.

Republican Senator Lindsey Graham added: “I think you’re going to see a lot of these scrums, and here’s the way they’ll end: We’ll pass the bill sometime tomorrow.”

For the sake of the parabolic market, he better be right. 

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cossack55's picture

I've met Mr. Fuck. I refer to him as CONgress

knukles's picture

 Don't worry.  Just weeks before the November 2020 elections these creatures will be telling ma and pa back home that they want to hear what ma and pa are thinking. 

Now, where were all these folks when Bammy was a Budget Bustin'?

Proctologist's picture

They were sucking the corporate teat.

macholatte's picture

 

No problem blowing $5.6T on WAR or transporting $150B in cash to Iran but a little chicken feed $10B for the border wall or $350B for tax reform to improve the economy.... FUCK THAT!

This is all part of the Progressive RINO plan to lose the House and Senate, stonewall Trump and then sit in the corner and complain about what they coulda done if only they were the majority. 

 

totenkopf88's picture

Why have taxes at all when the MFers at the Fed can just print all of the Jude Fetzen they want?

nmewn's picture

Exactly, its way past time to call the socio-economic Keynesian's bluff. NO ONE should be paying over 10% in federal taxes and EVERYONE should be paying in or...

...its just not fayer ;-)

HisNameIsRP's picture

Only 350?  #Winning  BTFD!

Bes's picture

"The party is under enormous pressure to complete the tax measure with less than a year to go before the mid-term elections and with wealthy donors and large corporations demanding tax rate cuts."

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well it's nice to know who they listen to......

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bend over bitchez, you are going to lose on this deal

no talk of ending the FED

and Trump tweets about the "war on christmas" and doesn't give a fuck about the WAR ON CASH...

bobcatz's picture

They're QUICK to label Christmas as Pagan while raking it in during the holidays. http://wp.me/p4OZ4v-1zD

jeff montanye's picture

trump's tweet about the war on christmas (let's stop the wars on terror and drugs first) gave you the in, i see.  interesting stuff about saturnalia, knew the word but didn't know what it meant.

but on the topic of the tax cut, it may be just a tad too late to be a real "deficit hawk".  this may be more apparent after china's plan for a world reserve currency becomes clearer.

Shocker's picture

Get a deal done but don't add all the extra "crap" that always gets put in.

Time for a real deal

Jobs Coming back: http://www.dailyjobfix.com

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jay35's picture

The article mentions flushed faces as a sign of tension. I'd like to see actual combat on the floor of the Senate, representatives throwing chairs at each other, scrambling over their desks to get at each other's throats. That would sure make C-SPAN's ratings jump.

helloimjohnnycat's picture

He doesn't worry about the jooz snuffin' him cause he's too busy playing their game.

ejmoosa's picture

The State of Georgia has a surplus when the economy grows and a deficit when it doesn't.

Why doesn't the Federal Government behave the same way?

Because they want to spend every dime and then some.

Paul Kersey's picture

My sister from California called me and asked me if I had figured out what the new tax bill would do for me, or to me. I hadn't, but gave it some thought after she asked me.

 

I live in the deep south, and have low state and property tax rates. I also itemize. Even with the low rates, without the write-offs for state income taxes and property taxes, this "reform" bill will cost me an additional $7,000+. My wife and I don't make anything close to enough to qualify for the big tax breaks, but we make too much to cash in on small earner breaks (which will expire anyway). We are just married middle class commoners. Ryan and Goldmanites Cohn and Mnuchin, three of the six authors of the tax bill, weren't thinking of us when they crafted it.

 

Donald Trump, who just yesterday, in his best carnival barker voice, said that this tax "reform" bill was a great deal for the middle class, but that his very rich friends don't like it, was lying through his ass. He and his family, along with the Goldmanites, parasites, sodomites, and the rest of the donor class, will save billions.

nmewn's picture

You did everything but tell us what your household gross is, prolly just an oversight ;-)

Paul Kersey's picture

It's just enough to qualify as political roadkill.

nmewn's picture

;-)

And thats another thing, have you noticed these economically illiterate Think Progress "folks" having a nervous internet breakdown over ONE OF THE highest (if not THE highest) corporate tax rates in the WORLD dropping to 20%?

If you ask them what the corporate tax rate is in say "our sworn enemies" (lol) like Russia or China you get that deer in the headlights thingy. If you ask them an even simpler question like just WHERE does any corporation actually gets the MONEY to be taxed on...they go into full blown cognitive dissonance pussyhat wearing freak out mode.  

The answers of course are, the corporations pass every tax increase on it...on to...the consumer...in the form of...higher prices for the product they sell AND we...America...are taxing corporations the most.

Thats where this "progressive tax" bullshit has brought us as a...sow-ci-ity ;-)

Paul Kersey's picture

"have you noticed these economically illiterate Think Progress "folks" having a nervous internet breakdown over ONE OF THE highest (if not THE highest) corporate tax rates in the WORLD dropping to 20%?"

"we...America...tax corporations the most."

Not really. Any large corporation, that pays even close to 20%, has got idiots doing their corporate accounting. For years, GE paid an effective rate of 0% According to the GAO, the Large, profitable U.S. corporations paid an average effective federal tax rate of 12.6%.

"WHERE does any corporation actually gets the MONEY to be taxed on"

From Government sweetheart deals and stock buybacks financed by the Fed and the TBTF money changers at close to 0%. Other that taxpayer paid for weapons, this country doesn't manufacture shit anymore. That's why inner cities are slums and and the only things really growing in the country are the consumer debt, the national debt, waistlines and the spread of the rustbelt. By the way, those stock buybacks enable the corporatist kingpins' stock holdings to increase in value, and, because they take stocks as compensation, they can realize lower long-term capital gains rates than the average working stiffs, like my wife and I.

Corporations are the crooked politicians largest donors by far. Not only are they getting their money's worth, but they are writing off their legal bribes as business expenses. Heads they win, tails the working class folks lose.

nmewn's picture

Well, this tells me something about your circumstances...

"we...America...tax corporations the most."

Not really. Any large corporation, that pays even close to 20%, has got idiots doing their corporate accounting."

...my wife is a half partner in a SMALL corporation and it has to pay out bullshit expenses in order to keep the corporations tax rate down...(this is Keynesian socio-economic science) which is coming from HER/THEIR profit or she/it would be OUT...34%. 

Which, if you look at the corporate tax tables, 1120 you can easily see and I have exposed more than you. 

"WHERE does any corporation actually gets the MONEY to be taxed on"

From Government sweetheart deals and stock buybacks financed by the Fed and the TBTF money changers at close to 0%."

My wife doesn't work for any government agency, directly-contractually or inadvertently, so there are no "sweetheart deals". 

So again, how is dropping HER corporate rate a bad thing?

Paul Kersey's picture

Exactly, your wife works in a SMALL corporation. It's the big international corporations that get the government contracts, favorable legislation (paid for with huge legal bribes), and, though those bribes, own the politicians. Not only that, those politicians become "consultants" for the donor class corporations, or, like Billary and Obama, make up to $600 grand a pop for giving speeches (peddling influence), when they retire for a live of "serving the public". The corporation your wife works in is probably not part that donor class corporate culture.

Large corporations and banks own the politicians that pass the legislation that these large corporations (banks, big pharma, big insurance, big defense, etc.) actually draft, through their lawyers and accountants, themselves. That's how we got Obamacare, and Obamacare crushes small corporations, while giants, like Walmart and McDonald's, get away with paying less than dick.

Agstacker's picture

lol I was going to comment that he obviously didn't even read your response, LARGE vs SMALL corporations.

nmewn's picture

You're obviously not a business owner. 

nmewn's picture

Its not defined as a large corporate tax rate and a small corporate tax rate, its just a corporate tax rate.

It has brackets just like the individual tax rate ranging from 15% on up to 50k, once past only 50k the corporation starts getting hammered at 25% on anything over 50k. Over 75k it pays 34% on anything between 50-75k and it gets even worse between 100 to 335k where a corporation pays 39%!!!

Then, we get to do this lovely thing called our Individual Return where, what she was "allowed to bring home" is combined with mine.

And as far as ObamaCare, Jonathan Gruber was exactly right when he got caught talking about "the stupidity of the American voter" which has exactly zero to do with lobbyists or what corporations want or don't want.

Except...he was talking about the stupidity of the progressive voter because I can guarantee-damned-T you there was not one conservative, in this entire nation, that was for this Pelosi-Reid-Hussein ObamaCare train wreck, in fact we told everyone it would be the train wreck that it is and they still didn't listen.

Those are the simple facts, as simple as I can make them. 

gatorengineer's picture

I trust that the either you or the company is writing off home office expense, gas, a meal out a week as a business expense.  the time spent surfing the next for the "like" is itemizable.  If you are a small business, there are a ton of write-offs.

nmewn's picture

Yes.

But that folds in to part of what I'm talking about, some of it is mis-allocation of capital, where it is spent purely for tax considerations. 

For example, instead of keeping the old scanner you buy a new one and chunk the old one (that still works fine) in the dumpster. Now I understand Keynesian theory/ideology where they say that's good for scanner maker's but it's still just like saying war is good for window glass maker's.

It's a mis-allocation of capital if unnecessary.  

Paul Kersey's picture

Had you done any research, you would have discovered that the bill does not treat small and large businesses in the way. If it did the National Federation of Independent Business, a a conservative lobbying group for small businesses, recently come out with the following statement?

"This bill leaves too many small businesses behind. We are concerned that the pass-through provision does not help most small businesses. Small business is the engine of the economy. We believe that tax reform should provide substantial relief to all small businesses, so they can reinvest their money, grow, and create jobs."

Did you know, for example, that while the plan calls for cutting the large corporate rate to 20 percent, from the current 35 percent, small businesses will still have to pay 25 percent? Is that what you call equal treatment for large and small businesses?

Nmewn, you are so caught up in the conservative vs progressive divide and conquer tactics, used by the corporatist wealth extracting money changers, that you don't allow yourself to see what's really happening. Do you really think that a tax bill crafted by Goldmanite President Cohn, Goldmanite partner and Soros partner Mnuchin, and Paul "Deep State" Ryan was written to make things better for middle class Americans? Do you think that adding another $1.7 trillion to the deficit, and putting that borrowed money into the offshore bank accounts of the rentier/bondholder class is a good thing for the middle class? If so, if you and your wife have any money left after paying taxes, I've got a great deal for you on some Arizona ocean front property for you.

chestergimli's picture

Just like grocery stores, all companies compare prices for the sake of competition. They aren’t going to lower prices because of lower taxes. They’re going to lower prices because maybe the competition has.

Just another fight over the money. Get rid of any and all of them.

Retarded Idiot's picture

Right. We pay the corps income taxes through pricing, and pay it again on our wages. Only way is to make money under the table.

boattrash's picture

Nmewn, I hope you (and others here) can find time to listen to Spirko's opinion on the tax bill. It's awesome! Skip Fwd to 58:20

http://www.thesurvivalpodcast.com/calls-11-16-17

JoeSoMD's picture

Thanks for the link... hadn't listened to that guy before... enjoyed his discourse.

boattrash's picture

Quite welcome. He's been one of the most accurate individuals I've run into in about the last 9 yrs.

Retarded Idiot's picture

And no SS Tax when you take stock as compensation.

Hata Mari's picture

nmewn, that's just too much thinking for most folks!

ElTerco's picture

The current tax code works just fine at bringing the effective rate below 20%. The headline rate is irrelevant, even if it is one of the highest in the world.

nmewn's picture

lol...these are not the Keynesian droid accountants you are looking for...let them pass...move along ;-)

agNau's picture

Tell em about Georgie Soros tax breaks...
Tell em about Georgie Soros tax breaks...

agNau's picture

Then send them a calculator, with instructions, and online tutoring.

slightlyskeptical's picture

The worldwide average top corporate income tax rate is 22.6 percent (30.6 percentweighted by GDP)

slightlyskeptical's picture

The worldwide average top corporate income tax rate is 22.6 percent (30.6 percentweighted by GDP)

PrintemDano's picture

Does it really matter?  Nobody's taxes should be going up in this tax "cut" bill.  I'm @ roughly $165,000 and my Fed tax increase will be between $10,000 and $14,000.  This bill can suck an egg.

hannah's picture

from what i have seenmiddle class people will be paying more. the break is for the rich and people on welfare. funny how a tax break will cause an increase in public debt. how can that be when the budget is cut by the amount of tax break...ohi get it...the gov never cuts its spending...duh

Paul Kersey's picture

"ohi get it...the gov never cuts its spending...duh"

Correct. If the Government cut spending and paid off debt, then the national debt would be going down. It ain't ever going down.

CatInTheHat's picture

It is NOT for people on welfare.

Where do people get the idea that people everywhere are on welfare?

Bill Clinton took care of that 25 years ago.

The SNAP program helps low income WORKING families feed their kids. There is little left of the middle class due to massive inequality. 

The median family income is $58,000 a year. Half the country is in povery or on the brink. If there was ever a time when what's left of the social contract in extending empathy and compassion toward our most vulnerable it is NOW with the social programs we have left.

Those programs will be GUTTED if this bill passes. Medicare, that helps mainly people with disabilities and the elderly, many in nursing homes, Medicaid that helps low income families with children and the disabled, housing will be gutted at a time when the homeless crisis is the worst it has been since the depression. 

Every fucking day I see another homeless person digging through the dumpster at the back of our local grocery store. And these are KIDS. We have 20,000 HOMELESS COLLEGE STUDSNTS spread out between two counties. 

Not alot of welfare going on around here 

Kinda makes you wonder what will happen to those elderly folks who are completely dependent on Medicare and Medicaid for their care. They will have no place to go and no 'welfare'

I really have to wonder about anyone who supports this tax bill that is symbolic of the corruption in power. They don't even bother to hide their GLEE over the human lives that will be destroyed by this bill. We had 65,000. PEOPLE DIE last year from drug overdose. The hopelessness and pain people feel at the psychopathy displayed by their government and what it has already done to their lives is overwhelming. Student losn debt is outrageous and our uuseless and endless wars have us 21 TRILLION in debt NOW, with another 21 TRILLION DOLLARS missing from the defense department as of 2015. It can't even be audited. 

The level of evil in this country and in our government makes me think the US needs a reset. A serious crisis that wakes people up from their complacency and ignorance.

None of this shit is the fault of those in poverty. It's the parasites in ooeer, looting the treasury and with this tax bill, it is welfare alright.

Welfare for the WEALTHY on our BACKS.

Bigotry, racism and GREED are why these asshats can commit war crimes, crimes against humanity and against our constitution.  Nowhere is this more appartnt than this Savage tax bill 

Next on the agenda? WAR....

Donald J. Trump's picture

$7K consider yourself lucky.  My prop taxes are 18k.  That shift alone is about 5 or 6 k in extra taxes for me.  I;m looking at about 10k extra.

 

Has anyone given any real thought to incorporating oneself.  It might be feasable with this new tax plan.  Everyone become a business.

samuraitrader's picture

its the taxes that give the federal reserve notes their value. since they are created from thin air they have no intrinsic value. it was the same with the tally stick for 600 years in englend. a piece of wood had value because it was accepted by the crown for payment.