The Republican plan to overhaul the US tax code is now one step closer to passing, after Tennessee Republican Senator Bob Corker abruptly switched his position and announced his support for the controversial bill. The surprise move came after a controversial last-minute addition to the bill that would personally enrich Corker. The provision would slash taxes on income from real estate LLCs; Corker is a real estate mogul. The New York Times reports those who will most benefit from the Republicans’ tax bill are big corporations, multimillionaires, private equity managers, private schools, liquor stores, lawyers, tax accountants and President Trump and his family. Meanwhile, Florida Senator Marco Rubio announced his support for the tax plan on Friday after an expansion to the child tax credit — even though the expansion won’t benefit the children of undocumented parents. Republican lawmakers are now pressing forward for a final vote on Trump’s tax plan this week. We speak with David Sirota, senior editor for investigations at the International Business Times.
AMY GOODMAN: We turn to the Republican plan to overhaul the US tax code, which appears to be a step closer to passing after Tennessee Republican Senator Bob Corker abruptly switched his position and announced his support for the tax plan. The surprise move by the Republican senator came after a controversial, last-minute addition to the bill that would personally enrich him. It would slash taxes on income from real estate LLCs. Corker is a real estate mogul. On Sunday, while speaking with ABC’s George Stephanopoulos, Senate Majority Whip John Cornyn pushed back against accusations that lawmakers slipped a “Corker kickback” into the bill.
SEN. JOHN CORNYN: Picking out one piece in a thousand-page bill and saying, “Well, this is going to benefit somebody,” I just think takes the whole bill out of context.
GEORGE STEPHANOPOULOS: Well, but except that this provision wasn’t included either in the House or the Senate bill. It apparently was added at the last minute. Why was that done? Why was it necessary to include that provision?
SEN. JOHN CORNYN: Well, we were working very hard. It was a very intense process. As I said, the Democrats did refuse to participate. And what we’ve tried to do is cobble together the votes we needed to get this bill passed.
AMY GOODMAN: That was Senate Majority Whip John Cornyn.
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Arizona Republican Senator John McCain will miss the vote, so — though President Trump says he can return from Arizona. Yes, he has gone to Arizona, Senator McCain, to recover from chemotherapy treatments for his brain tumor.
The New York Times reports those who will most benefit from the Republicans’ tax bill are big corporations, multimillionaires, private equity managers, private schools, liquor stores, lawyers, tax accountants and President Trump and his family. The tax bill will slash the corporate tax rate from 35 percent down to 21 percent. It will raise an exception on the estate tax to $22 million, meaning people with tens of millions of dollars will receive a major tax cut. It would also keep intact the so-called carried interest loophole, which massively benefits private equity managers. And it will slash the tax rate for so-called pass-through income, benefiting Senator Corker, President Trump’s family and other real estate moguls. As The New York Timesreports, “Numerous industries will benefit from the Republican tax overhaul, but perhaps none as dramatically as the industry where Mr. Trump earned his riches: commercial real estate.”
In contrast, the Times reports, those who will be most hurt by the tax plan are the elderly, low-income families, immigrants, people buying health insurance, the island of Puerto Rico and homeowners in the states of New York, New Jersey and California. The tax bill will repeal the individual health insurance mandate, which experts say will cause insurance premiums to skyrocket. The Congressional Budget Office estimates 13 million Americans are projected to lose their health insurance under the plan. It will also impose a new requirement that families must provide a Social Security number to claim the child tax credit, meaning many undocumented parents will no longer be able to receive this credit, even if their children are US citizens, because the parents don’t have a Social Security number. It used to be that you had to put in the children’s Social Security number. Florida Senator Marco Rubio announced his support for the tax plan Friday after an expansion of the child tax credit, even though the expansion won’t benefit the children of undocumented parents. Republican lawmakers are now pressing forward for a final vote on Trump’s tax plan this week.
For more, we’re joined here in New York by Kali Akuno, co-founder and co-director of Cooperation Jackson, a network of worker cooperatives in Jackson, Mississippi, author of Jackson Rising: The Struggle for Economic Democracy and Black Self-Determination in Jackson, Mississippi. And in Denver, we’re joined by David Sirota. He’s senior editor for investigations at the International Business Times, and he is the one who broke the story, “Donald Trump and GOP Leaders Could Be Enriched by Last-Minute Tax Break Inserted into Final Bill.”
David, why don’t we begin with you? Explain what you discovered.
DAVID SIROTA: Sure. This is all about pass-through income. It’s income that’s generated from limited liability companies, LLCs, and other kinds of partnerships. And basically, what happened was that the House, in its bill, had a sweeping tax reduction for income earned from those kinds of entities. And the Senate bill — and this is the key point — the Senate bill that Bob Corker voted on, and voted against, included various restrictions in the bill designed to prevent a tax cut for income earned through these pass-through entities, from those pass-through entities that aren’t employing people. It included provisions basically trying to limit the tax cut only to LLCs that essentially pay wages, the idea being that the tax cut was supposed to be structured to companies that are actually employing people.
So here’s what happens. Corker votes against that bill with those restrictions. Then the House and Senate comes together and negotiates a final compromised bill, a final bill in the conference report. And magically, a provision shows up in the final conference report that the framework goes with the Senate provisions, seeming to have limits on the tax cuts for it, but it included a relatively narrow loophole that said the tax cuts could still effectively be accessed by LLCs that have few to no employees in it. And tax experts tell us that that is a particularly big benefit to real estate LLCs, the kind that the Trump — President Trump has, the kind that Jared Kushner has, the kind that a series of top lawmakers, including Bob Corker, has. These are LLCs with real estate holdings in the LLCs generating rental income. So, when that bill came out, on Friday afternoon, the conference report with that special provision in it, all of a sudden Bob Corker said that he is now switching his vote from “no” to “yes” on the final bill. And this is a provision that could potentially, in a very serious way, enrich him. Economists have told us he could make between $500,000 and a million dollars in tax cuts from this bill, based on his own filings.
Now, did Corker change his vote because this provision was in the bill? That’s unclear. But that’s what a lot of critics are asking. A lot of folks are wondering: Why did he change his vote? He had originally voted against the bill, saying he was voting against it because it would explode the deficit. All of a sudden, he changes his vote to “yes” when the provision is in the final bill. And that bill, the final bill, explodes the deficit, according to the Joint Committee on Taxation. And Bob Corker has not offered up a very clear answer as to why he has switched his vote.
AMY GOODMAN: So, David Sirota, this is particularly important — right? — because Bob Corker, the Republican Tennessee senator, who took this defiant stand and said he would not support the tax bill, switching his vote, is retiring, going back to private business in Tennessee.
DAVID SIROTA: It’s absolutely — he is a pivotal player in this. And it’s hard to overstate how important he is. You had mentioned that John McCain is probably not going to be there for the vote, which means that two Senate Republican votes could basically kill this $1.5 trillion tax cut. So if Corker was against the bill, as he was against the original bill, and one other senator, whether it’s Jeff Flake, who said he’s undecided, or Susan Collins, this bill would go down. So, in other words, Bob Corker potentially has the entire Senate bill in his hands.
And so — and that clip that you heard of Senator Cornyn saying — asked directly, “Why was this provision put in?” and he basically says, “I’m trying to — we were trying to cobble together the votes,” this has raised a lot of questions about what is motivating Bob Corker. And then, late last night, Corker wrote a letter. Facing this firestorm of criticism about what he has done, he wrote a letter to Senator Orrin Hatch, the chairman of the Senate Finance Committee, basically suggesting he didn’t know about this provision, demanding answers about how the provision got into the bill. And what’s really important about this is, it’s a very unusual event, where you have a Republican senator, who potentially has the fate of President Trump’s entire tax bill in his hands, now publicly putting pressure on his own party, demanding answers about this provision — a situation that potentially suggests that Corker’s vote may still be in flux.
AMY GOODMAN: Very significant, also having to admit he hadn’t read this. He didn’t know it was in there, if in fact that’s true, and demanding an explanation of how this provision got in, that would so handsomely profit Corker himself.
DAVID SIROTA: Yeah, well, I mean, it’s interesting in how you view this. I mean, Bob Corker told us, in a series of phone calls, that he hadn’t even bothered to read the bill, that he had already previously announced he would support. He, at one point, criticized this provision and then tried to walk back the criticism. And so, you know, some people look at this and say, “Well, Bob Corker is telling the truth. He didn’t read the bill,” which folks will say that that’s incredible that he’s going to vote for a bill he hasn’t even read. “But he didn’t read the bill, and we believe him, and he wants answers about the provision.” There’s another way to look at it and say, you know, “How would a guy who is a real estate mogul, who has complex investments, not know about a giant potential tax cut inserted into the bill, directed at precisely the kind of business that he’s in?” and that his explanation doesn’t make much sense and that this may all just be a smokescreen. It’s really hard to tell what’s going on.