By Richard Rubin, Kristina Peterson and Siobhan Hughes
WASHINGTON -- Sens. Marco Rubio and Bob Corker plan to support
the GOP tax plan, bolstering Republicans' hopes for passage of a
tax bill next week as they prepare to release final details of a
plan later Friday.
Mr. Rubio of Florida agreed to vote for the overhaul after
Republicans agreed to a more generous tax credit for people with
children.
Mr. Corker, who had been the only Republican senator to vote
against a Senate tax bill, reversed after Senate Majority Leader
Mitch McConnell (R., Ky.) this week made some unspecified changes
to the bill that helped get the Tennessee senator on board.
"I know every bill we consider is imperfect and the question
becomes is our country better off with or without this piece of
legislation," Mr. Corker said in a statement. "I think we are
better off with it. I realize this is a bet on our country's
enterprising spirit, and that is a bet I am willing to make."
Lawmakers agreed to make more of the child tax credit
refundable, which refers to the amount of money taxpayers get back
from the government even if they pay no income tax. Such filers
would now be able to get $1,400 of the $2,000-per-child credit,
said Rep. Kristi Noem (R., S.D.), one of the members of the
House-Senate negotiating committee. That is up from $1,100 in the
version that passed the Senate.
The agreement doesn't make one change that Mr. Rubio had wanted:
that the credit be refundable from the first dollar earned, which
would make it more generous for very-low-income households. The
Senate bill starts making the credit refundable against household
income above $2,500.
A spokeswoman said Friday afternoon that Mr. Rubio will vote for
the plan. In two tweets, the Florida Republican called the
tax-credit changes "a solid step toward broader reforms which are
both Pro-Growth and Pro-Worker" while saying there was "still much
more to do" in coming years.
Lawmakers offset the cost of change by reversing a decision to
allow the child tax credit for 17-year-olds. The final bill, like
current law, would make it available only for children under age
17. Republicans set themselves a $1.5 trillion cap on their tax
cut, and exceeding that would prevent them from passing the bill
without Democratic votes in the Senate.
Republicans were signing the House-Senate agreement Friday
morning, which clears the path for full votes in both chambers. The
bill won't be publicly released until later Friday, and that will
show the final tradeoffs Republicans made as well as details like
the rates and bracket structure.
Final votes in the House and Senate are expected next week.
Broadly, the bill would cut taxes on corporations and
pass-through businesses such as partnerships and S corporations,
and it would lower the top rate on the highest-earning households.
It would nearly double the standard deduction -- taken by those
filers that don't itemize their returns -- but repeal the personal
exemption. The deductions for state and local taxes and mortgage
interest would be limited. The bill is expected to double the
estate-tax exemption, repeal the individual mandate to have health
insurance and allow oil drilling in the Arctic National Wildlife
Refuge.
The bill would also revamp the rules for taxing U.S. companies'
foreign income and allow faster writeoffs for business
investments.
The bill is likely to add about $1 trillion to budget deficits
over the next decade, even after accounting for economic
growth.
Democrats have seized on independent analysis that the tax bill
would benefit high-income households and corporations the most,
noting that many of the individual tax cuts would be temporary but
corporate reductions permanent. They also have complained that they
have been shut out of the process in crafting the bill.
"They just did it in the back room and probably with their
lobbyist friends," House Minority Leader Nancy Pelosi (D., Calif.)
said on Thursday.
Republicans say that the economic analysis doesn't capture the
effects of creating a more favorable business climate, and they
argue that under the new tax system, companies would pay workers
more and create new jobs. Republicans also say that future
Congresses will extend the individual tax cuts, which under the
legislation would expire after 2025.
"It's going to provide the kind of middle-class tax relief
that's desperately needed right now," said Sen. Rob Portman (R.,
Ohio). "It's critically important for setting the stage for
American leadership going into the future."
Mr. Rubio, of Florida, who voted for the Senate bill, had been
objecting to changes Republicans have discussed since then and
complained about his party's priorities. GOP leaders were willing
to set a 21% corporate tax rate instead of 20%, and lower the top
individual tax rate to 37%, without changing the child credit. The
Senate rejected his attempt to set the corporate tax rate at 20.94%
to increase refundability.
Ms. Noem said Mr. Rubio hadn't personally told her he would now
support the bill, but she thought the boost would be enough to get
him on board. The refundable piece of the credit is important to
families with very low income, who pay payroll taxes but often
don't owe income taxes.
"I believe that we're in a good spot and we should be able to
earn his support," Ms. Noem said.
Mr. Rubio has said he would oppose the bill unless the portion
that is refundable was "meaningfully higher" than the 55% in the
Senate-passed version.
"We have not seen bill text, and until we see if the percentage
of the refundable credit is significantly higher, then our position
remains the same," Olivia Perez-Cubas, a spokeswoman for Mr. Rubio,
said Friday morning.
A spokesman for Sen. Mike Lee, a Utah Republican who along with
Mr. Rubio had sought a more generous child tax credit, said their
office hadn't yet seen the text of the bill.
The current credit is $1,000 and it is largely refundable,
though that is limited for very-low-income families. The doubled
credit in the Senate bill is designed to offset the loss of
exemptions for household dependents.
Republicans have 52 seats in the 100-member Senate, meaning that
any three GOP senators can block the tax bill. Sens. Susan Collins
of Maine and Jeff Flake of Arizona have also said they are
undecided on the final version. GOP Sens. John McCain of Arizona
and Thad Cochran of Mississippi are having health problems, raising
concerns among Republicans about their availability for a final
vote.
Write to Richard Rubin at richard.rubin@wsj.com, Kristina
Peterson at kristina.peterson@wsj.com and Siobhan Hughes at
siobhan.hughes@wsj.com
(END) Dow Jones Newswires
December 15, 2017 15:57 ET (20:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.