Share This Article with a Friend!


McCain Returns To Arizona Throwing Tax Bill Vote Into Doubt

The much-watered-down GOP tax plan has now been thrown into doubt by the potential absence of Arizona’s Republican Senator John McCain and the ill health of Mississippi’s Republican Senator Thad Cochran.

Through the establishment-engineered defeat of Alabama conservative Roy Moore, Republicans have a two-vote majority in the Senate for just a few more days, and McCain, already fighting a deadly brain cancer, is, John McCain brain canceraccording to our inside sources, leaving Bethesda Naval Hospital and returning to Arizona, rather than the Senate floor.

The pro-growth elements of the bill were already seriously watered-down to appease Republican class-warriors like Maine’s Senator Susan Collins, but the changes are not expected to attract any Democratic support.

More importantly, most negative of the changes was that the rate that U.S. companies would pay on an estimated $3.1 trillion in earnings they’ve stockpiled overseas crept up to 15.5 percent in the final version of the bill released Friday.

President Trump had initially called for a top rate around 10 percent for companies’ offshore profits, but as GOP lawmakers searched for revenue to offset the cost of other tax cuts, one of the sources they settled on was multinationals’ offshore cash reports Bloomberg’s Lynnley Browning.

Under the GOP tax plan that is headed for votes in the House and Senate this week, earnings that companies hold offshore as cash and cash equivalents would be taxed at 15.5 percent. Income invested in less-liquid assets -- including plants and equipment -- would be taxed at 8 percent. Both taxes would be mandatory, not optional.

However, even that watered-down pro-growth element of the plan is in doubt if McCain and Cochran are not available to vote “AYE” when the bill comes to the floor.

Setting the rates at those levels would generate about $40 billion more than if the rates were 14.5 percent and 7.5 percent, as proposed in the Senate bill that was approved Dec. 2 – but raising the rates will not generate any Democratic votes.

Under current law, companies can defer paying U.S. income taxes on their foreign earnings at the corporate rate of 35 percent until they return, or “repatriate,” them to the U.S. The deferral provision has led companies to stockpile those earnings overseas.

Browning reports Republican tax-writers say the “deemed repatriation” tax imposed by the GOP bill would clear the way for many of those companies to bring their earnings back to the U.S.

Conservative economist Glenn Hubbard, a top official in the George W. Bush administration, told ABC’s This Week, “I think it [the tax legislation] will do two big things. One, in the short run, it will provide some boost to demand. I think the Fed would probably look forward to that. In the longer run, the issue is on the supply side. The tax bill could probably raise GDP by about 3 percent in the long run. That’s not the beginning of a new era, but it is certainly very, very positive for the economy. Economists have long campaigned on tax reform as the biggest single policy weapon.”

Douglas Holtz-Eakin, president of the conservative American Action Forum and former director of the Congressional Budget Office, and other supporters of the tax plan acknowledge that the tax plan will elevate deficits. But they insist that it will be worthwhile. They argue that companies will use the tax savings to hire, expand, invest and raise pay -- and thereby energize the economy.

"The calculation at one level is pretty simple," Holtz-Eakin told Paul Wiseman of The Associated Press, "We're going to have larger deficits, and that is worth it for the growth we're going to get."

While we are disappointed in the watered-down pro-growth elements of the bill – a 10 percent repatriation rate as President Trump originally proposed or the 12 percent that the House passed would be much better than the 15.5 percent that found its way into the final bill, all of the sops to class warfare offered in the final bill may be for naught if Republicans don’t have the votes on the floor to pass the bill.

Share this

What should happen

He needs to die in the next couple of days, so that his being absent doesn't count against the Republicans (there would be only 99 Senators), unless the Governor can appoint a (conservative) replacement before the Senate votes.

Mccain

These congress folk need to take a leave when they become to ill to understand what is going on. No votes should be allowed when they have dementia like Conyers, Pelosi, etc. or on last leg like McCain. We need to replace him immediately so that he can go home to family and live out his remaining days with loved ones.