GOP tax cut for rich and corporations in trouble in Senate

WASHINGTON—The Republicans’ tax cut for corporations and the rich hit trouble in the Senate when a second GOP senator, Florida’s Marco Rubio, promised to vote “no” unless it gives more help to the poor and middle class through a refundable child care tax credit. 

Rubio’s stand followed prior opposition by Sen. Bob Corker, R-Tenn., and questions about whether two seriously ailing GOP senators would be able to even show up for the key vote. There is also speculation that other senators, particularly in view of Donald Trump’s plummeting popularity and weakened political position after the GOP defeat in Alabama, might be more willing to buck the president and his unpopular legislation.

Together, even just the two no-votes and the two absences would leave the ruling Republicans short of the 50 votes they need—plus Vice President Mike Pence as a tie-breaker—to pass the $1.5 trillion 10-year measure.

Mass demonstrations, including peaceful civil disobedience actions at the Capitol, continue to add to the pressure, too.

At a press conference here today top AFL-CIO leaders, including the federation’s president, Richard Trumka and American Federation of Teachers President Randi Weingarten, outlined the labor movement’s view of the tax plan. Labor’s position is that it will lead to millions of working-class people paying more while corporations and billionaires pay less. The nation’s unions say it is a job killer, too, and will lead to cuts in Medicare, Medicaid, and Social Security.

The Republicans’ $1.5 trillion 10-year measure would “cut services, kill manufacturing, outsource American jobs, weaken our economy and undermine our future,” Trumka said.

To stop it, unions have been rallying in and outside lawmakers’ offices, engaged their activist lists in the campaign, set up a special section of the AFL-CIO’ website to provide answers and talking points for people to use against the measure, and taking to social media to drive the opposition, he said.

The Teachers union alone has made 500,000 phone calls against the bill, and engaged in civil disobedience, added Weingarten. If the effort to derail the tax cut for the rich fails, workers will hold lawmakers accountable next November, she promised.

“It’s a massive transfer of wealth,” said a third union leader, Bricklayers President James Boland. “We’ll shout this from the mountaintops until everybody hears.

Senate Majority Leader Mitch McConnell, R-Ky., wants to rush the tax cut through by Christmas, the deadline set by Trump. McConnell also wants to push it through before new Sen. Doug Jones, D-Ala., takes office in January, replacing a Republican and cutting the GOP to 51 senators.

The Republican-run House is expected to approve the tax cut on party-line votes, after the leaders of the anti-everything right-wing Freedom Caucus fell into line earlier in the week.

All 46 Senate Democrats and both independents oppose the tax cut. Sen. Bernie Sanders, Ind-Vt., pointed out the day before that 62 percent of its benefits would go to the top 1 percent, with almost two-thirds of that figure going to the top 0.1 percent. That’s what Rubio claims upset him.

Rubio got a doubling of the child care tax credit, to $2,000, into the tax bill. The catch, he said, is the credit is useless unless you actually pay income taxes. It doesn’t cover payroll taxes, which all wage-earners pay. For most lower and middle-income people, their payroll taxes exceed their income taxes.

Unless the tax credit is extended to offset payroll taxes, too, Rubio said, he’ll vote no.

The problem “is the impact on low-income workers or workers in the lower part of the income scale—firefighters, teachers, police officers, construction workers, welders, home health aides,” Rubio said in arguing for a fully refundable child care tax credit last week.

“These are working people, the backbone of our country, the people who have suffered the most over the last 25 or 30 years, as the economy has made some people very profitable but left far too many workers behind…Their primary tax liability is the payroll tax. If you make $40,000 a year, the biggest chunk of the taxes you pay is the payroll tax.”

But the child care tax credit doesn’t offset that, even at $2,000 per child, he said. “When I hear people say that people making $40,000 or $30,000 a year don’t pay taxes, they are wrong. They pay taxes. They take money out of your paycheck. They paid a tax. It is irrelevant whether it is a payroll tax or an income tax. Those are taxes. When I hear people say that, it is offensive. Working people across the income scale pay taxes. Unfortunately, that is not recognized in a lot of the debates that are going on here about working people,” Rubio added.

Rubio sounded the right note in his push on amending the tax bill, but given his previous about-face on immigration reform, his apparently pro-working family stance on the refundable credit is sure to leave many uncertain of his commitment. His amendment would still leave out millions of working people who are single or couples without children. It also does nothing to restore CHIP, the Children’s Health Insurance Program, causing people to have to spend more on health care.

Unions, community groups, college students, and progressives staunchly oppose the GOP bill, and leaders of the nation’s big cities joined them on Dec. 14. They said the entire GOP tax cut would particularly hurt majority-minority cities and neighborhoods.

“The writers of the Republican tax bill don’t just have it out for families living in cities and towns. This bill amounts to a full-fledged assault on those cities and towns themselves,” said New Orleans Mayor Mitch Landrieu, president of the U.S. Conference of Mayors, and Rep. Cedric Richmond, D-La., chair of the Congressional Black Caucus.

The GOP’s bill “threatens the state and local tax deduction. This deduction—one of the most popular and frequently used portions of the tax code, for over 100 years—ensures the federal government does not tax the dollars used to pay state and local taxes. Abridging it, then, would effectively force Americans to pay taxes twice on the same income. When families support their schools and police forces, they should rest assured the federal government won’t tax those dollars again.”

Richmond and Landrieu said eliminating the deduction—which they called double taxation—will “spike annual bills” in 43 million middle-class households, according to state and local financial officers. All that money “will benefit big business,” they added.  And business gets to keep its state and local tax deduction, while individual taxpayers don’t. “It’s the kind of proposal that could only come out of a partisan process.”

“Any tax reform bill should be measured by its potential to create jobs and strengthen our communities. This bill will do neither. By eliminating popular tax deductions and removing essential financing options and tax credits, the GOP tax bill would prove disastrous for middle class families and the cities they live, work and play in.”