The following article by Jim Tankersley was posted on the New York Times website November 29, 2017:
WASHINGTON — President Trump urged senators this month to repeal the Affordable Care Act’s requirement that most Americans have health insurance and use the proceeds to slash the top tax rate paid by the richest Americans, a suggestion that pitted his priorities against his daughter and Republican senators intent on helping the middle class.
In the end, the president accepted only a partial victory. He got the repeal of the health law’s individual mandate, but gave up on an income tax rate cut that would have directly benefited him personally. Instead, Ivanka Trump and her allies in the Senate prevailed in their push to include an expanded child tax credit.
“This was certainly an uphill battle, especially given that it is not an issue that is as widely understood,” said Senator Mike Lee, Republican of Utah and a leading advocate of the expanded child tax credit. “We didn’t necessarily have the sense that the president was opposed to it. I still don’t have that sense. I think if he had been, things would have worked out differently than they did.”
Two White House officials pushed back against the notion that Ms. Trump had split with her father. They said middle-income tax relief was one of the president’s priorities and that Ms. Trump worked in lock step with the administration on all aspects of tax reform.
But the fight is actually continuing. Later this week, Mr. Lee and Senator Marco Rubio, a Florida Republican, will take on another top priority of the president’s, cutting the corporate tax rate to 20 percent from 35 percent. The senators plan to offer an amendment that would cut the corporate tax rate to 22 percent, instead of 20 percent, and use the proceeds to help families with little or no income tax liabilities benefit from the expanded child credit and to allow the child credit to rise with inflation.
A White House spokesman, Raj Shah, wasted no time declaring the president’s opposition on Wednesday.
Mr. Trump was not secretive about his desire for a lower income tax rate for the nation’s wealthiest families. This month, he tweeted his desire:
But his suggestion that the top rate come down clashed directly with the push to assist the middle class. The president had also pressed to eliminate the estate tax, a provision that would have hugely benefited his heirs.
Republicans on the Senate Finance Committee did vote unanimously to add the repeal of the Affordable Care Act mandate to their bill, effectively giving themselves more than $300 billion to spend on additional tax cuts. Then lawmakers went to work to devote that money to priorities other than lowering the top income tax rate or cutting the estate tax.
Senators Lee and Rubio enlisted Senator Tim Scott of South Carolina, who talks frequently with Ms. Trump, and Senator Dean Heller of Nevada to push the child credit expansion in the Finance Committee.
“It seemed to me to be common sense if our goal was to deliver as much of a tax break for the middle class on down,” Mr. Scott said.
The victory somewhat improved the optics of a bill that most opinion polls suggest is unpopular among a majority of the American public. By expanding the credit to $2,000 per child from $1,650, as initially proposed in the Senate bill, Republicans substantially reduced the number of middle-class families who are likely to face an immediate tax increase under the bill.
The higher child tax credit in the Senate tax plan avoids tax increases for 3.5 million families, compared to the less generous credit increase in the House plan. (Because that credit and all other individual tax breaks in the bill are scheduled to expire in 2025 to satisfy Senate procedural rules, all middle-class families face a looming tax hike in 2026 if a future Congress does not intervene.)
Republicans have drawn criticism in the House and the Senate for pitching their tax plans as benefiting the middle class, only to see analysts conclude that, because they eliminate some tax breaks while lowering rates, many working families would actually see their taxes go up. Early analyses suggested that roughly a quarter of middle-class families could see their taxes rise in a year if the initial Senate bill became law, compared to about half of families under the House bill.
Senate Republicans worried about those distributional effects, Mr. Scott said. By expanding the credit and also allowing taxpayers of higher incomes to claim it, he added, “That combination solved the problem for a lot of people.”
Democrats have criticized the decision to include mandate repeal in the tax bill. The Congressional Budget Office estimates it will lead to 13 million fewer Americans choosing to buy health insurance or sign up for government-provided insurance such as Medicaid, and its analysis finds the move will, on balance, reduce incomes for workers earning $30,000 and below, because they will receive fewer government benefits and subsidies for care.
The Republican bill is “a plan to take health care away from people,” Senator Michael Bennet, Democrat of Colorado, said in a Facebook town hall meeting on Tuesday night. He offered partial praise, though, for the expanded child credit. “If that were done the right way,” he said, “it really would help working families a lot. As the provision is now drafted, it does too much for people like senators, frankly, and families in high-income categories, and not enough for working families.”
Republicans say mandate repeal, which is politically popular, gives consumers the freedom to choose whether they buy coverage without fear of government penalty. They say the budget office is wrong to score benefits that consumers willingly forgo as lost income.
But they are happy to accept the analysis by the Joint Committee on Taxation that the move will free up more than $300 billion — through reduced government spending — that can be used to offset tax reductions in the bill.
That money gave an opening to Mr. Lee, Mr. Rubio and Ms. Trump, who had worked together for months laying the groundwork for the child credit expansion. The group was disappointed in the House version of the tax bill and the initial Senate bill, which expanded the credit from $1,000 today, but counteracted that expansion with other lost tax breaks for families.
“The nominal expansion in the original bill was quite arguably completely eaten up by other changes,” Mr. Lee said.
Neither Mr. Scott nor Mr. Lee would characterize their conversations with the president during that negotiating period, but Mr. Lee said there were several competing ideas for how to allocate the $300 billion.
Had Mr. Trump’s request for a 35 percent top rate been granted in full, Republicans would have delivered even larger benefits to high earners, whom the joint committee judges already to be the largest recipients of tax cuts under the plan. Mr. Trump would have likely seen his tax bill shrink considerably.
White House officials say the president was pleased simply to see the mandate repeal included. And while Mr. Lee is still pushing for a further expansion of the child credit — one that would allow more low-income families with little or no income tax liabilities to benefit from it — he called the overall bill “a step in the right direction.”
He, Mr. Rubio, Mr. Scott and Mr. Heller are all expected to vote for it on the Senate floor.
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