Congress isn’t going to approve the tax reform bill introduced in the House this week, Republican campaign strategist Steve Schmidt predicted during a federal legislative and political forum at the REALTORS® Conference & Expo on Saturday.
Only the country’s largest corporations—which already pay well below the statutory corporate tax rate of 35 percent—have reason to support the bill, said Schmidt, who was a top advisor to President George W. Bush during his administration. “This is a massive corporate tax cut for the biggest companies in the world,” he said. “It’s not a tax proposal that benefits small business. It adds a trillion and a half dollars to the debt, and it’s a massive tax increase if you live in a high-cost state.”
Schmidt said Republican lawmakers in the House are motivated to pass the bill only because they need a legislative victory going into the 2018 congressional elections. “There’s a panic in the House that they have zero achievements,” he said. Republicans hold a 24-seat majority in the House, but many of those districts are at risk because Hillary Clinton fared well in them during the 2016 presidential election.
Passage of the tax package would pit Republican lawmakers in high-cost states such as California, New York, and New Jersey against their voters’ interests. “It’s a massive tax increase on their constituents,” Schmidt said. “If it passes the House, it certainly won’t pass the Senate.”
NAR favors tax reform but opposes the GOP bill because it would eliminate the tax incentives for homeownership. Most homeowners would no longer find it financially advantageous to itemize, so they would see no benefit in the tax code for owning rather than renting. It would also make it harder for home sellers to exclude their sale proceeds from capital gains taxes. NAR estimates home values across the country could plummet more than 10 percent if the bill passes.
Schmidt said the tax bill is a product of lawmakers’ lack of incentive to find “commonsensical solutions” to the country’s problems. To get the country back on track, reforms are needed to the way congressional districts are drawn and to the campaign finance system, he said.