- The Washington Times - Thursday, September 27, 2018

The House on Thursday passed two pieces “Tax Reform 2.0” package, as the GOP tries to cement itself as the party of lower taxes and an ascendant economy before the closing stretch of the fall campaign.

One bill provides more incentives for Americans to save for their retirements, while the other expands benefits for new businesses in a bid to further jump-start the economy.

House leaders also are planning to vote Friday on a third bill that locks in the individual rate cuts in last year’s $1.5 trillion tax cut law, saying they’re giving Democrats another chance to support the tax cuts they universally opposed last year.

“This bill was not crafted for Democrats. It wasn’t crafted for Republicans,” said Rep. Mike Kelly, the sponsor of the retirement savings bill. “It was crafted for Americans — hard-working Americans who put all their life into a job that look forward to retirement.”

Mr. Kelly’s bill, which passed Thursday on a 240-177 vote, tries to incentivize people to save more by allowing small businesses to band together to create more affordable 401(k) retirement plans.

It also eliminates the current rules that bar people older than 70 1/2 years old from making contributions to certain retirement plans, and makes it easier for families to contribute to and withdraw from certain plans without taking a tax penalty.

The second bill, which passed 260-156, allows new businesses to write off more of their start-up costs — up to $20,000 — to try to spur innovation.

“We should all be committed to making the United States the innovative leader of the world,” said Rep. Vern Buchanan, the bill’s sponsor, saying the bill is a “down payment” toward reaching that goal.

Rep. Pete Sessions, Texas Republican, said the GOP is prepared to use this week’s votes to paint a contrast with Democrats, who have called to repeal last year’s tax law and reverse the lower rates for individuals and businesses.

“You will see that there are two different visions — one vision that still wants to go back to higher taxation, rules and regulations, government control,” Mr. Sessions said. “And we are as a Republican Party and as the free enterprise party going to stand up and say that we will be there on behalf of all workers.”

Democrats, though, said the new bills will only serve to increase federal deficits even more and that new incentives to save don’t mean much for people who are simply struggling to make ends meet.

“For families that have little or nothing in savings, this bill does nothing — much like the bloated Republican tax scam and its sorry sequel,” said Rep. Lloyd Doggett, Texas Democrat.

The Joint Committee on Taxation, Congress’s non-partisan tax scorekeeper, estimates that the two bills that passed Thursday would collectively cost about $26 billion over 10 years.

The bigger price tag is for the third bill, which would lock in the individual rate cuts, along with an expanded standard deduction, a new child tax credit, and other provisions that were written to expire after 2025 to comply with budget rules.

Factoring in economic growth, JCT estimated the bill to lock in the individual cuts would cost the government about $545 billion over 10 years.

A vote on that bill is expected on Friday in the House.

The bills aren’t expected to pass in the more evenly divided Senate since they would need 60 votes to overcome a potential filibuster — though lawmakers have been working on separate bipartisan legislation aimed at bolstering savings that do contain elements of the bill from Mr. Kelly that passed Thursday.

Some blue-state House Republicans are also wary that the third bill includes a permanent $10,000 cap on the state and local tax deduction, saying that provision will disproportionately hurt their constituents.

But Treasury Secretary Steven Mnuchin earlier in the day defended the tax cuts in general, and said the booming economy is a product of the administration’s work on taxes, regulations and trade.

“We couldn’t be more excited about these changes,” Mr. Mnuchin said.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide