Republicans started their tax-overhaul efforts saying they wanted to make permanent changes to the system. They've been unable to achieve that.
Hemmed in Republicans' decision to cap additional deficits at $1.5 trillion over a decade and use a congressional procedure that prevents any bigger deficits beyond 2027, the GOP tax plans include a multitude of "sunrises" and "sunsets" that delay some tax cuts and cause others to expire within a few years.
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For example, the House plan, which passed on Thursday, sunsets a new $300 family tax credit and other provisions and delays an estate tax repeal until 2025.
In the Senate plan, many of the individual income tax provisions end after 2026, including lower individual rates, larger child tax credits and a larger standard deduction. It also delays a corporate tax rate cut until 2019.
That helps the budget math add up. It also creates an impermanence to many proposals and an unpredictability that risks leaving some businesses and individuals disappointed with the outcome.
When tax cuts expire, their cost vanishes from official scores of the cost, even if Republicans actually want and expect to extend them. If some proposals are extended, the long-run actual cost of the policies could be larger than the $1.5 trillion on paper.
The new Senate bill has $515 billion of such maneuvers, according to the Committee for a Responsible Federal Budget. The House has $511 billion of them, according to the group.
Democrats are criticizing Republicans for some of these expirations, particularly the proposal to let individual tax cuts lapse while making corporate tax cuts permanent.
"For the multinational corporations, their handouts are set in stone, written in ink, locked in place, the key thrown away," said Sen. Ron Wyden (D., Ore.) "But not for the middle class."
Sen. Bob Corker (R., Tenn.), who is undecided on the tax bill, says Democrats are already trying out those slogans on him.
"It's important that the business taxes are permanent," he said. "I'm not much into optics. What I care about is what drives economic growth, and I think any economist would tell you it's the business side being something that's certain is what drives the economy."
Write to Richard Rubin at firstname.lastname@example.org
(END) Dow Jones Newswires
November 16, 2017 15:11 ET (20:11 GMT)