McCaskill Cites Concerns on Pass-Through Rate, Child Tax Credit

(Bloomberg) -- Senator Claire McCaskill of Missouri, who’s among the Democrats being courted to endorse a tax bill, said she still has concerns about slashing the rate on pass-through business income and the lack of details on how the child tax credit would be increased.

McCaskill attended a dinner at the Washington home of Jared Kushner and Ivanka Trump Monday night along with other Democratic and Republican senators. She said she’s worried that slashing the rate for partnerships, limited liability companies and other so-called “pass-through” businesses to 25 percent -- down from a current top rate of 39.6 percent -- would overwhelmingly benefit millionaires.

That position puts her at odds with President Donald Trump, whose advisers have said a rate of 25 percent for pass-through businesses is non-negotiable.

Treasury Secretary Steven Mnuchin and White House legislative affairs director Marc Short also attended the dinner, according to McCaskill. When she asked Mnuchin about the child tax credit, the Treasury secretary didn’t indicate a “real solid proposal,” she said, besides echoing the framework released last month by the White House and GOP leaders. That document calls for making the credit bigger, refundable and available for those with higher incomes.

“We discussed several issues and Secretary Mnuchin said we’re going to change that,” McCaskill said. “Everyone was saying the right things but then they are going to vote on a process that will allow them to vote on it with 50 votes,” McCaskill said, referring to the procedure GOP leaders have said they want to use that would permit a tax bill to pass the Senate with a simple majority.

McCaskill was in Trump’s crosshairs in September when he campaigned for a tax overhaul in her home state, saying she should be voted out of office if she doesn’t support it. She returned the favor this month, calling the president out for saying he wouldn’t benefit from his tax plan. Trump’s financial disclosure forms show that he has interests in roughly 500 entities, most of which are organized as limited liability companies.

--With assistance from Sahil Kapur

To contact the reporter on this story: Erik Wasson in Washington at ewasson@bloomberg.net.

To contact the editors responsible for this story: Kevin Whitelaw at kwhitelaw@bloomberg.net, Alexis Leondis, John Voskuhl