Republicans are poised to approve the first major overhaul of the American tax code in decades on Tuesday.
The GOP is rushing toward its year-end target to pass a tax bill, despite the measure's broad unpopularity in recent polls. The House aims to approve the legislation Tuesday afternoon, followed by the Senate in the evening.
If passed by both chambers, the bill will go to President Donald Trump's desk for him to sign it into law.
Republicans, who have long sought changes to the U.S. tax system, contend that their plan will spur an economic boom, encouraging businesses to create more jobs and boost workers' wages. Democrats warn of a gift to corporations and wealthy Americans that would cause more income inequality and balloon federal budget deficits.
The plan would chop the corporate tax rate to 21 percent from 35 percent, while giving more tax breaks to so-called pass-through businesses and including provisions to encourage more domestic business investment. It would trim most household tax rates and either expand or limit several popular deductions for individuals. Most individual cuts would expire, while corporate tax reductions would not.
Here are some of the factors at play in Tuesday's votes:
- Sen. Jeff Flake: Flake, a Republican from Arizona, is currently the only GOP senator in Washington for the vote who has not committed to supporting the tax plan. While he voted for the separate bill that passed the Senate, he is still evaluating the final plan negotiated by the House and Senate. Republicans can still approve the legislation without him — 50 GOP senators have committed to supporting it. Sen. John McCain, Flake's colleague from Arizona, is currently in his home state as he fights brain cancer.
- Blue-state House Republicans: At least seven House Republicans said they will vote against the bill as of Monday evening, according to NBC News. All of those members of Congress come from New York, California or New Jersey. GOP lawmakers from those high-tax states have pushed back against the bill's limits on state and local tax deductions, which could leave some of their constituents with a higher tax burden. The GOP plan would allow the deduction of up to $10,000 in state and local sales, income or property taxes. While it expands those tax breaks beyond what was included in the initial House and Senate plans, it would curb the deductions relative to current law.
- Budget deficits: The nonpartisan congressional scorekeeper the Joint Committee on Taxation projects the GOP plan would add more than $1.4 trillion to budget deficits over a decade. An estimate of a previous version of the plan said it would still add more than $1 trillion to deficits even after economic growth is taken into account. While Sen. Bob Corker, R-Tenn., opposed the Senate legislation over deficit concerns, he will support the final plan, despite little change to its projected effect on deficits. The loss of revenue under the plan could have broader implications beyond its effect on Tuesday's votes. Republican leaders have signaled they want to cut government spending next year by reforming social safety net programs. Reducing spending would help to blunt the deficit effects.
- Public opinion polling: A Monmouth University poll on Monday showed that nearly half of those surveyed disapproved of the Republican plan. Only 26 percent of respondents said they approved of it. The survey was only the latest in a string of polls showing similarly dismal numbers. On Tuesday, House Speaker Paul Ryan, R-Wis., told reporters that those numbers would improve when taxpayers see effects next year. "Results are going to make this popular," he said.