Individual Tax Cut Extension to Get Vote This Year, Ryan Says
(Bloomberg) -- The House will hold a vote this year to make individual tax cuts permanent, according to House Speaker Paul Ryan, even though the effort is unlikely to become law during this Congress.
The speaker’s comments signal the GOP is plowing ahead with a plan for a so-called phase two of tax cuts to bludgeon Democrats ahead of congressional elections in November. The attempt would require votes from at least nine Democrats in the Senate.
The GOP’s overhaul of the tax code permanently cut the corporate rate to 21 percent from 35 percent, but most of the provisions for individuals, including lower rates and expanded credits, are set to expire at the end of 2025.
“Tax certainty is very important for keeping this good economic news going, so obviously we believe that’s necessary for economic growth,” Ryan told reporters Tuesday. “We fully intend to make these things permanent, and that’s something we’ll be acting on this year.”
Ryan cited a recent report from the Congressional Budget Office showing that economic growth is projected to accelerate to 3.3 percent this year, thanks in part to the tax cuts. In the decade after 2019, however, average annual economic growth will be slower than last year’s 2.6 percent.
The Wisconsin Republican, who announced last week that he would retire in January, said he hasn’t seen projections of the impact that extending the individual cuts would have on the federal deficit. Ryan has spent much of his congressional career warning about the dangers of an increasingly heavy debt burden -- but he’s argued that government spending is the problem.
Making the individual cuts permanent is estimated to cost $1.5 trillion in the decade after 2025, according to a Tax Foundation analysis using numbers from the Joint Committee on Taxation. Reducing tax rates for individuals, especially high earners, has less impact on economic growth than lower tax rates for corporations.
Aside from committing to House action this year, Ryan didn’t provide a time frame for when the chamber would vote on a bill by Rodney Davis, an Illinois Republican, to make the individual cuts permanent.
©2018 Bloomberg L.P.