Tax bill's fate may depend on Maine's Susan Collins

Once again, U.S. Sen. Susan Collins may decide the fate of a major proposal touted by President Donald Trump — a tax overhaul.

The Maine Republican’s vote is crucial to winning passage in the Senate of a tax bill that would slice the corporate rate and cut most household taxes during the next decade.

The House already has approved a tax overhaul but the Senate measure, which may come up for a vote as early as this week, differs from it. Collins, who helped torpedo repeal of the Affordable Care Act in July, has indicated that she likes some provisions in each version but also has concerns about both.

Whether she votes for the Senate legislation, which would have to be reconciled with the House version in order to win final adoption, may depend on how it deals with the ACA, often called Obamacare.

The tax measure, however, has lots of controversial provisions that may make it tough to win a majority in the Senate despite the GOP’s hold on 52 of the 100 seats. If more than two senators vote against it, the bill won’t pass.

One Republican senator, Wisconsin’s Ron Johnson, has already said he’s opposed to it because he doesn’t like its treatment of some small businesses. Others, including Arizona’s Jeff Flake and Tennessee’s Bob Corker, have fretted in public about the $1.5 trillion it would add to the national debt by 2027.

Democrats, who are uniformly against the proposal, complain that it helps the rich and will ultimately cause taxes to rise for most American families. As it stands, a corporate rate cut would be enacted permanently while individual rate cuts expire in 10 years.

The Institute on Taxation and Economic Policy figured that in 2027, only the richest 20 percent would, on average, wind up with a tax cut, with the wealthiest 1 percent saving an average of $4,700. The poorest 20 percent of households would see their taxes rise by an average of $340, the institute figured.

Put another way, the average family would need to make about $150,000 annually to see any savings in their tax bills come 2027.

Initially, though, most people would see savings under either the House or Senate plan. But some of the provisions in one bill or the other could pose serious hardships for some, including graduate students who might have to pay taxes on the value of tuition they’re given and people who itemize high medical bills.

“Real tax reform would offer a hand to working families, small businesses and farmers, who are the real job creators in Maine,” said Lucas St. Clair, a Democrat seeking the opportunity to challenge U.S. Rep.Bruce Poliquin, a 2nd District Republican.

St. Clair called the tax plan “nothing more than a scheme to further stack the deck against working people.”

The bill passed by the Senate Finance Committee would abolish the individual mandate that requires people to buy health insurance or face a fine. Experts have expressed worry that if the mandate is stripped away, President Barack Obama’s landmark program could disintegrate.

Sarah Austin, a policy analyst with the Maine Center for Economic Policy, said in a prepared statement that removing the mandate would lead to 50,000 Mainers losing coverage and increase costs for many others.

The Congressional Budget Office, which is nonpartisan, estimated that about 13 million fewer people nationwide would have health insurance if the mandate is junked.

Collins told a television interview show last week that “the biggest mistake” in the Senate tax bill is the mandate repeal, which she doesn’t support. But she provided an opening that might secure her vote anyway if Congress adopts a proposal to bolster the insurance market with federal cash to lessen the impact of the move.

“It’s a problem for me if it is not mitigated,” Collins told ABC. “But there is a way to mitigate the impact that it would have on insurance premiums.”

She also pointed out that tossing out the mandate is “very different from what we were faced with this past summer and fall when insurance was being taken away from people who wanted to be insured.”

Collins, who has also expressed worry about possible Medicaid cuts, is pushing a bill that would allocate $4.5 billion during the next two years to assist states in setting up a reinsurance program that would help insurers cover the costs of their most costly cases, a program Maine successfully used just before Obamacare took effect.

Collins already has one behind-the-scenes victory in the tax plan that senators are constantly revising. While the House bill calls for eliminating a $250 tax deduction for teachers who buy their own school supplies,the Senate bill now raises the deduction to $500, a measure Collins championed.

It is one of many changes backers are making to try to win over reluctant colleagues. Another revision, clearly aimed at keeping Republican U.S. Sen. Lisa Murkowski of Alaska on board, would allow oil drilling in Alaska’s Arctic National Wildlife Refuge. Collins was the only GOP senator to vote against that idea last month.

Trump said Monday in a statement on Twitter that the tax bill “is getting better and better” and “will be great for ALL!”

“With just a few changes, some mathematical, the middle class and job producers can get even more in actual dollars and savings,” he added in another tweet. He said he hopes the Senate GOP “come through for all of us.”

scollins@sunjournal.com