GOP lawmakers returned to Washington on November 27 ready to pass a tax overhaul anticipated to benefit the wealthy Americans. Party leaders are working hard to resolve any niggling concerns which could torpedo the passage of the bill. The GOP has reasons to do so. It is under immense pressure to pull off any legislative victory- which it has been unable to do, so far, from the beginning of the Trump administration.
Amendments and small businesses
Even as the GOP leaders pressed for a vote on the Senate floor during the last week of November, there seems to be minimal momentum for the amendments which may assist low-income Americans. Such amendments are wanted by many Senators on both sides of the political divide. As per the Congressional Budget Office, the Senate bill, if passed, will hurt workers earning below $30,000 in the immediate future. The richest will be benefited the most over a spread of 10 subsequent years. These anticipated effects are in line with the estimates done by other analysis like that made by Joint Committee on Taxation. The latter discovered that the best benefits will go solely to the prosperous over the course of time. As per budget office estimates, within 2027, Americans who earn $75,000 or less will suffer a hike in taxes. This will happen due to the expiration of individual tax cuts within 2025 end.
There are rumblings within the Republican camp. Two GOP Senators- Steve Daines (Montana) and Ron Johnson (Wisconsin), have already warned that they will not go with the Republican plan if the party does not do more to help small and medium-sized business owners.
The bill is itself a contentious one, the effects of which will be to widen the existing gulf between the rich and middle-class Americans. The list of efforts includes rewarding a few high-income business persons already enjoying tax breaks in Senate bill. They are now courted by the trade groups and conservative lawmakers to sweeten the benefits.
The principal point of the debate is to decide whether small businesses should be treated with more favor. On the list are also what is known as the pass-through entities. These are businesses where the profits get distributed to owners and then taxed at individual rates. According to Owen Zidar of Booth School of Business, University of Chicago, about 70 percent of the pass-through income goes through the premium one percent of American earners.