In the News

The pre-midterm elections push, which clicked into gear Tuesday, is portrayed as championing the middle class and small businesses. Rep. Kevin Brady, R-Texas, who heads the tax-writing House Ways and Means Committee, said making the tax cuts permanent would build on the tax law’s economic boost by adding 1.5 million new jobs and increasing wages.

With the elections about four months away, polls are showing mixed support among voters for the $1.5 trillion package of individual and corporate tax cuts that President Donald Trump signed into law as his marquee legislative achievement.

The new tax proposals are aimed at giving Republican lawmakers a selling point as they prepare to leave Washington to campaign in their districts.

“It’s going to identify Republican priorities,” said Marc Gerson, a former majority tax counsel for the Ways and Means Committee, who now heads the Washington law firm Miller & Chevalier.

The new Republican outline also calls for new tax incentives for savings, by creating a “universal savings account” for families and allowing the popular, tax-free 529 college savings accounts to also be used to pay for apprenticeship fees and home schooling expenses, as well as paying off student debt. In addition, workers would be able to tap their retirement savings accounts without tax penalty to cover expenses from the birth of a child or an adoption.

Start-up businesses would be permitted to write off more of their initial costs.

“We plan to work off this framework to build on the growing successes of the (tax law) and ensure this energized economy continues moving forward,” Brady said in a statement.

The tax law that took effect Jan. 1, the most sweeping rewrite of the U.S. tax code in three decades, is estimated to add around $1.5 trillion to the ballooning deficit. And deficit hawks as well as Democratic lawmakers — who were unanimous in opposing the tax legislation last year — wondered Tuesday how the Republicans intended to pay for the extended tax cuts.

“It’s amazing to think that Washington’s record debt binge by Congress still isn’t over,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement. “This country is drowning in red ink. It is beyond irresponsible to add even a dollar more to the debt, and anyone who cares about fiscal responsibility should dismiss further tax cuts outright.”

Sen. Ron Wyden of Oregon, the senior Democrat on the Senate Finance Committee, said the new Republican proposal “doubles down on massive breaks for the rich and sweeteners for high fliers while trying to cover up the broken middle-class promises from their first tax law.”