Conservative House members dealt a blow Thursday to a proposed amendment to the Senate tax plan by Republican Sens. Marco Rubio of Florida and Utah’s Mike Lee that would trim the corporate tax cut to help lower-income working families.
The plan, which was floated Wednesday, would make the child tax credit refundable against payroll taxes. To offset losses in tax revenue from the refunds, the proposal calls for an adjustment to the corporate tax rate from the proposed 20 percent to 22 percent.
“That dog won’t hunt on the House side,” Freedom Caucus Chairman Mark Meadows of North Carolina said Thursday of raising the proposed corporate rate to 22 percent to pay for an expansion of the child tax credit.
“We have made it very clear that 20 percent corporate is the red line,” he said.
While it is unlikely Rubio and Lee would gain the necessary votes from Republicans to advance it, Democrats eager to do anything they can to stop the legislation could join with a few GOP members to pass it despite opposing the underlying bill.
The amendment, if included in the Senate-passed version, would complicate negotiations between the chambers as they seek to find a version that can pass both bodies.
Parents receive a $1,000 credit per child — refundable against their income taxes — under existing law. The House bill passed in November increases that rate to $1,600 per child and adds a new family credit, $300 per parent and non-child dependent. The Senate proposal would double the rate to $2,000 per child.
Rubio and Lee want to allow lower-income working families who don’t pay income taxes to access the Senate’s proposed child tax credit.
While Meadows supports Lee’s and Rubio’s efforts to expand eligibility for the credit, he said they’d have to find a different pay-for mechanism than raising the proposed corporate tax rate.
If it passes the Senate, “we are not going to support that,” Meadows said, adding he has spoken with Rubio and Lee about his concerns.
Meadows’s position tracks with previous comments from the White House, which said yesterday it did not support Rubio-Lee.
President Donald Trump supports a child tax credit, White House deputy press secretary Raj Shah told reporters Wednesday. But the administration appears to prioritize “[making] businesses more competitive,” as Shah put it.
“We would not support raising the corporate rate as outlined in that amendment,“ he said.
Other conservatives at a panel in Washington on Thursday downplayed the issue of the child tax credit for families, saying overall economic growth as a result of the GOP tax bill’s passage would be a boon for all Americans, including the families the Rubio-Lee amendment targets.
“The middle class hasn’t had a wage increase for 30 years,” Virginia Republican Rep. Dave Brat said. “The best thing we can do for families is give them an economy that’s growing again. … The most important feat by far is just the economic growth and the wage rate growth that we expect to get out of this [Republican tax overhaul] for real.”