A year ago, it seemed that a bipartisan agreement on a comprehensive tax overhaul was near.
But on Wednesday, that pact collapsed in a deadlock.
The Senate’s latest bill, which is still in the final stages of drafting, would have taxed corporations at a rate lower than that of the individual income tax.
The measure would have raised $1.4 trillion over a decade by cutting taxes on individuals and corporations and raising the estate tax.
Republicans say they will work to change the bill as they move forward.
But there’s little sign of that happening.
“There’s no consensus on tax reform right now,” said Daniel Zandi, a former White House economic adviser who is now at the firm Moody’s Analytics.
“The White House and congressional leaders have made it very clear that there’s no agreement.”
While the White House has been pushing for a compromise, the tax plan remains a sticking point.
Senate Majority Leader Mitch McConnell, R-Ky., who has long argued that the bill is necessary, has signaled he would not support it.
And President Donald Trump, who has complained about the bill’s impact on the middle class, has suggested that he will not support the plan, according to aides.
The bill would also cut the corporate tax rate from 35% to 20%.
But Republicans have warned that it would hurt the economy, hurting businesses.
“We will continue to work to improve the bill and keep the middle-class families and the American worker safe and secure,” White House Budget Director Mick Mulvaney said in a statement.
Democrats say they are working to get Republicans on board.
They are pushing for tax breaks for families and businesses that would help middle- and lower-income families and companies, as well as an expansion of the Earned Income Tax Credit, the main source of economic growth for low-income workers.
They say the legislation would help spur job creation and spur investment in the country’s crumbling infrastructure.
But some Republicans have argued that such measures would also hurt middle-income Americans and create incentives for businesses to relocate overseas.
“These tax breaks and credits will hurt the middle and lower class Americans the most,” said Rep. Dave Camp, R -Mich.
“They’ll help them move overseas.
They’ll hurt the businesses and they’ll hurt our economy.”
“They’re not working for you,” Camp added.
The White House also argues that the legislation, which would provide tax cuts for individuals and businesses for up to $11,000, would help businesses grow and expand and would encourage investment.
But many economists and business groups say that the proposal would do little to help the economy.
“For years, we’ve argued that this plan would boost growth but would do very little to create jobs,” said Kevin Hassett, senior vice president of tax policy at the Center on Budget and Policy Priorities.
“It’s clear from the evidence we’ve seen that this is a plan to benefit the wealthy and corporations, not middle- or lower-class Americans.”
Republicans have said the bill would raise $1 trillion over 10 years by eliminating loopholes and other loopholes that allow corporations and the wealthy to avoid paying taxes.
The nonpartisan Tax Policy Center said in an analysis released last week that the proposed changes would raise just $1,200 for every $1 that corporations and individuals pay in taxes.
“Our research shows that the impact on real GDP is modest, but the tax changes in this legislation would increase the deficit and will hurt future tax revenue, including future deficits in the future,” the center said.
In addition to eliminating the deduction for state and local taxes, Republicans say the bill repeals a provision that allows corporations to deduct up to 20% of their payroll taxes, from $11 million to $100 million.
It also eliminates a provision called the estate-tax break, which allows corporations and estates to take tax deductions in addition to paying taxes, which could hurt middle class families and small businesses.
And it repeals an alternative minimum tax, which provides a tax break to lower- and middle-wage workers.
But the proposal includes a number of other provisions that will hurt middle and low-wage families and business owners.
It eliminates the estate and individual tax deductions, which will hurt millions of lower-middle-income and middle class Americans who already are facing significant tax bills.
It repeals the deduction of state and municipal taxes, eliminating a significant source of revenue for cities and towns.
It removes the deduction on the amount of interest earned by homeowners that would be taxed at a lower rate.
It would also make it harder for businesses with fewer than 10 employees to deduct their wages.
The legislation would also limit the amount that can be deducted for state, local and foreign income taxes, with the top individual rate at 35% and a top rate of 39.6%.
And it would raise taxes on small businesses and households earning $50,000 to $75,000 annually.
The House and Senate are expected to vote on the final version of the tax bill Wednesday afternoon. The