The GOP Tax Bill Can Be Replaced, But It's Not Likely

by Hannah Golden
Drew Angerer/Getty Images News/Getty Images

The final, reconciled version of the GOP tax bill is working its way through Congress on Tuesday, Dec. 19. As both the House and Senate are expected to pass the sweeping overhaul of the nation's tax code, one question is surfacing among those who oppose it: Can the tax bill be reversed? It's complicated, and not likely.

If the tax bill passes in both houses on Tuesday and President Donald Trump signs it, it becomes law. But it's possible the tax bill could potentially be "reversed," per se, if Congress chooses to rewrite taxes again and are then able to get it passed — so, for instance, if the Democrats become the majority in 2018 and decide to make a new tax bill to replace this one. As we've seen with tax reform already this year, it's not a simple task, even when one party rules both houses. And while some are optimistic that big Democratic wins in the 2018 midterm elections could give the party control of Congress again, having the votes and actually getting repeal passed are two different things.

The tax bill, titled the Tax Cuts and Jobs Act, is loaded with complex provisions. If an effort to reverse the bill comes to pass, it's not certain whether all of these provisions would be undone.

The tax bill has gone through some significant changes in the last several days as Republican leaders of Congress sought to reconcile the differences between the Senate and House versions. Some of the most objected to parts of the bill have been removed in the reconciliation process — for example, the child tax credit, which was initially on the chopping block, has now been expanded in the final version.

But other provisions have been snuck in at the 11th hour.

A provision that would benefit owners of "pass-through" companies, such as partnerships and LLCs, is receiving particular attention. International Business Times reports that these pass-through businesses are seen as small businesses often owned by the wealthy for real estate or investment ventures that don't create jobs. The provision, providing a 20 percent deduction, would benefit people like President Donald Trump and Senator Bob Corker of Tennessee (who has now given his support to the bill) to take advantage of this additional tax break. The provision has stirred questions and drawn criticism since it was announced in the final bill, which was unveiled on Friday, Dec. 15.

While parts of the bill could be repealed or reversed, it's unlikely that the cut to the corporate tax rate is one of them.

According to Vox, the current 35 percent rate has been proposed to go down to 21 percent under the GOP plan, but the idea to lower that rate has seen bipartisan support in the past, particularly for finding ways to close tax breaks to get there. As Vox points out, in 2012, Obama proposed to lower the corporate tax rate to 28 percent. Dropping the corporate tax rate by this much would lead to a $1 trillion deficient.

How exactly does the GOP propose to pay for such a giant chunk of lose revenue? Basically, by adding to the national deficit, and over time, to raise individuals' taxes and chip away at the Affordable Care Act, known as Obamacare, to make up the difference.

Expiration dates are the fine print.

For several provisions under the GOP bill, there's also an expiration date. For example, the standard deduction was increased almost two-fold, from $6,350 to $12,000 and up to $24,000 for couples. But this drops off after eight years, per Vox. Estate tax cuts would also change after 2025. After a honeymoon period of decreased taxes for some Americans, by 2027, the majority would be paying higher taxes than they are now.

So, whether the bill could be repealed, and which parts would go, remains a big question.

Per Business Insider's Josh Barro, repealing the individual mandate under Obamacare would save the government about $300 billion over ten years. It's no secret that Democrats by and large oppose the health care repeal. And Barro also thinks that the pass-through provision won't last. But those are just a few of the provisions on the table.

So while it's possible that parts of the GOP tax bill could be reversed with a Democratic-led Congress in 2018, that's still a far-off picture. Democrats would most likely need to take back both houses of Congress in order to make that happen, which, while entirely possible, is still very much up in the air. And even if the Democrats clinch a big win next year, some provisions of the tax plan — particularly the corporate tax break — are probably not going anywhere.