U.S. House panel backs bill to make Trump tax cuts permanent

Nancy Pelosi and Chuck Schumer

Nancy Pelosi and Chuck Schumer

Ahead of an increasingly narrow midterm election that will determine which political party controls the House and the Senate, Republicans are relying on a strong economy and the promise of a second round of tax cuts to bolster their chances in November.

The new round being proposed by Republicans would add a further $576 billion to the deficit, even taking possibly higher economic growth into account, said the Tax Foundation, a pro-business think tank in Washington.

A committee-level vote is being planned by the House tax committee Chairman Kevin Brady on Thursday, Sept. 13.

While the law slashed the corporate tax rate permanently from 35 percent to 21 percent, its tax cuts for individuals and the millions of US "pass-through" businesses expire in eight years.

In his tweets, Trump has flatly and openly stated that the rule of law should not apply to Republican members of Congress who are under indictment because applying the law to them makes a Democratic takeover of the House (which means real accountability for Trump as well) more likely.

Officials with the main House Democratic "super pac", the House Majority Fund, said their polling in August showed 17 incumbent Republicans trailing and six tied - almost enough to recapture the majority without even factoring in the open seats the G.O.P.is defending. Much like how Ronald Reagan said about not leaving the Democratic Party and the party left him, I also feel that the Republican Party has left me.

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But the price tag for extending them will be high. Making individual tax cuts permanent would add another $630 billion to the deficit by 2019, according to the congressional Joint Committee on Taxation.

Beyond those three years, the costs would continue to pile up. From 2029 to 2038, the think tank said, that cost could reach as high as $3.4 trillion.

"After handing massive unpaid-for tax breaks to Big Pharma, Wall Street and the wealthiest 1 percent with the first GOP tax scam for the rich, House Republicans are here with more of the same", House Democratic leader Nancy Pelosi said Monday.

The GOP's second round of tax cuts would also make permanent the new 20 percent deduction for "pass-through" entities - companies in which business income is "passed through" to an individual's tax returns - as well as reductions to the alternative minimum tax mostly paid by those earning more than six figures.

They included a measure by Rep. Bill Pascrell of New Jersey to repeal the cap on federal deductions for state and local taxes that came in the new tax law. This has put Republican lawmakers in high-tax states like New York, New Jersey, California, Illinois and Minnesota in a hard position because they would either support a provision that would put their states in a vulnerable place or oppose a bill that is backed by their own party.

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