Congress gets closer to passing new tax bill

After much deliberation and compromise, Congress has developed a final tax bill. A conference committee was created to address the differences between the House and Senate bills that both passed their respective branches, but that laid out contrary aspects of the bill.

The biggest change that the bill lays out is the large tax cut given to businesses and large corporations, heavily criticized by many. Before the bill, corporations were taxed at 35% of revenue. If the reforms were to be passed by Congress, however, those same organizations would pay only 21% of their revenue. This provision has proven to be largely discordant amongst the parties. Those in favor of the bill say that creating an environment for businesses in which cutting taxes would allow for cost of production to be lowered, which might then leave more money in the business. The hope is that the cut will both increase employment and make American businesses more competitive. However, opposition to the bill suggest that the tax break will only affect upper management and those who run the companies.

One controversy over the bill is how it will affect the deficit. It has been projected that the reforms could widen the United States’ deficit by 1.5 trillion dollars in ten years, but that number is purely the cost of the reform on the government. It does not reflect the profit that Republicans say will ensue with the more free market approach of taxing companies. This controversy provokes one of the largest debates regarding the bill: if it is better for government to collect taxes, or if the money should stay in the hands of businesses. Republicans offer a plan similar to Reagan’s “Trickle Down Economics”, and cite it as an extremely prosperous period. Yet Democrats point to President Clinton’s tax increase and its tremendous success.

Already the proposed reform is being criticized for its partisanship and politics. The matter was polarizing in nature, and the vote was split almost exactly down the middle in the Senate to create the original bill with all of the Democrats voting no, and all but one of the Republicans voting yes. The one no vote on the Republican party came from Tennessee Senator Bob Corker. Corker dissented on grounds that the tax bill was not situated to assist those of low socioeconomic standings. However, after the most recent bill, Senator Corker has decided to vote in favor of the bill. However, even with the seemingly unified Republican party, the bill is still heavily criticized and opposed by Democrats. Now that the conference committee has created a bill, both the House and the Senate must vote again on the new bill.