Daines isn't on board with the GOP tax plan — yet

Missoulian (also appeared in Billings Gazette and Helena IR) - November 28, 2017

Sen. Steve Daines released this photo Monday of himself and President Donald Trump, who he thanked for listening to his concerns about the GOP tax bill.

Montana Republican Sen. Steve Daines withheld his support Monday from the Senate’s tax plan, insisting that it must not harm “main street businesses” while benefiting large corporations.

As currently proposed, the tax plan is also opposed by Montana Sen. Jon Tester, a Democrat.

No more than two Republicans can oppose the bill for it to pass the Senate. Daines became the second potential “no” vote, alongside Sen. Ron Johnson, R-Wisc.

In a written statement, Daines said Congress promised, when it took on tax cuts, “to create more high-paying jobs and to grow the economy.”

But the bill now under consideration could be detrimental to small businesses, he said.

“I want to see changes to the tax cut bill that ensure main street businesses are not put at a competitive disadvantage against large corporations,” Daines said. “Two-thirds of our job creation comes from main street businesses and I’m doing what I can to make sure all of America is stronger and more competitive.

“Before I can support this bill, this improvement needs to be made.”

In a subsequent tweet, Daines said he spoke with President Donald Trump over the weekend, “working through these concerns,” and remains optimistic that the bill can be changed to win his support.

His office also released a photo of Daines and the president shaking hands.

“I remain optimistic and continue working with my colleagues to find a solution,” Daines said.

Both Daines and Johnson are concerned about so-called “pass-through” businesses that are taxed under the individual tax code because they are sole proprietorships or partnerships.

As it now stands, the Senate GOP’s tax bill would cut the corporate tax rate from 35 percent to 20 percent.

Pass-through businesses would receive a 17.4-percentage point deduction, but would still end up with a higher effective tax rate than corporations. 

In his statement, Daines said “main street jobs” account for 68 percent of all private sector employment in Montana and that the state is No. 1 nationally in main street job creation.

Two-thirds of all new jobs created in America come from main street businesses, he said. Those businesses are responsible for 55 percent of all private sector jobs.

Trump acknowledged concerns about the main street tax rate in his own tweet Monday.

“The Tax Cut Bill is coming along very well,” the president wrote, “great support. With just a few changes, some mathematical, the middle class and job producers can get even more in actual dollars and savings and the pass-through provision becomes simpler and really works well!”

Democrat Tester, meanwhile, is expected to join all Senate Democrats in voting against the GOP tax plan. 

In part, Tester opposes increasing the federal debt; the bill would add $1.5 trillion to the debt. And it would force cuts to Medicare and increase taxes to lower-income and middle-income Americans.

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.