Congressional Republicans have reached a deal to lower the top tax rate for the highest earners while negotiating the final version of their tax bill, MSNBC reports.
Republicans agreed to cross President Donald Trump’s “red line” to cut corporate taxes by 1 percent less than they intended in order to pay for the additional tax cut on the highest earners.
Trump and his advisors had long insisted that the corporate tax rate must drop from 35 percent to 20 percent as the president repeated a debunked lie that the United States has the highest corporate tax rate in the world.
Trump said that the 20 percent rate was “very much a red line” that he refused to cross.
“The president’s number one issue that is not negotiable is 20% corporate taxes,” Treasury Secretary Steven Mnuchin echoed.
Knowing that Trump doesn’t actually care what’s in the bill, Republicans have decided to cut the corporate tax rate to 21 percent instead, while dropping the top tax rate for individuals from 39.6 percent to 37 percent.
The move is curious for a deeply unpopular party trying to pass a hugely unpopular tax bill that has already been bigly derided for overwhelmingly favoring the rich at the expense of the middle-class.
It’s especially curious that Republicans agreed to raise the corporate tax rate in order to pay for the additional tax breaks for the rich after refusing to do the same for programs that might actually help families, like expanding the child tax credit.
Just below the surface, the politics of this get even messier.
During the recent Senate debate over the tax plan, some senators, including some Republicans, pushed for a slightly smaller corporate tax break in order to help finance other priorities. Sen. Marco Rubio (R-Fla.), for example, took the lead on a proposal that would have lowered the corporate to around 21%, instead of 20%, with the difference going to finance an expanded child tax credit.
GOP leaders, however, refused. The 20% corporate rate was a line in the sand. Republicans, en masse, simply wouldn’t tolerate anything higher, no matter how well intentioned various proposals might have been. To go above 20% would be a betrayal of party principles and an attack on future economic growth.
And yet, here we are, watching those same Republicans agree to a 21% corporate rate in order to finance more tax cuts for the Americans who already have the most.
So, essentially, Republicans insisted that they could not cross the president’s “red line” in order to pass policies that help a large number of American families but have no problem doing the same when it comes to funneling more money to their richest donors.
And as they did the first time around, Republicans are rushing the final bill to pass it before word gets out about new unpopular policies they stuck in the bill.
On Thursday, Vice President Mike Pence delayed his trip to the Middle East until next Tuesday, suggesting that the GOP plans to hold a vote by Monday, as well as revealing that the party is not confident they can get enough votes for the disastrous bill without Pence’s tie-breaking vote.