In their mad dash to pass their ludicrously awful tax bill, Senate Republicans appear to have inadvertently erased some of their own proposed tax cuts.
The Senate passed its version of the tax reform bill late Friday night. Not caring that the bill was deeply unpopular with other lawmakers and the overwhelming majority of the nation, the GOP was so desperate for some kind of legislative victory that senators were adding new provisions and canceling old ones in handwritten notes on the margins of the bill’s pages. One of these handwritten changes involved the alternative minimum tax.
Slate reports that the GOP had originally planned to repeal the AMT. Their explanation for how the provision works is that it’s “basically a parallel tax code meant to prevent companies from zeroing out their IRS bills. It doesn’t allow businesses to take as many tax breaks but, in theory, is also supposed to have a lower rate.”
Here’s where the GOP got itself into trouble. See, the whole idea of their tax reform bill is to help the rich get richer and the poor get poorer (it has been estimated that 80% of their reform will benefit no one but the top one percent of Americans). So anything in the bill that doesn’t favor their corporate overlords is a big, fat no-no. But when Republicans added the AMT back in, they left the minimum rate at 20%. The problem was, they had also just lowered the overall corporate tax rate to 20%, so the AMT wouldn’t give corporations a lower tax rate—it would only prevent them from getting certain tax breaks, like the research and development break and the participation exemption.
That means that instead of hemorrhaging even more money in their effort to give the entire country away to corporate interests, the GOP made a mistake and ended up letting the government keep a few hundred billion dollars. Whoops! Wouldn’t want that!
Lily Batchelder points out how this mistake constrains the GOP, as with this error in place, they can’t just ask the House to simply pass their bill. They have to take it to conference to fix the mistake. (In the same tweet thread, she also mentions that $300 billion is probably a conservative estimate as to what the AMT will cost.)
In the end, this likely doesn’t have a huge effect, it merely limits the Republicans’ options. And with reports coming out that senators like Jeff Flake and Susan Collins feel as though their party manipulated and devalued them, those options might be more difficult for the GOP than ever.