Republican U.S. Sen. Susan Collins has joined the GOP-controlled Senate to pass a massive and controversial overhaul of the federal tax code. Collins, considered a key swing vote, supported it after securing several changes, drawing praise from conservative groups and widespread condemnation from progressives.
In a statement, Collins said the current tax code is unfair and complicated.
“We need a tax system that will boost the economy, help the middle class, and encourage small businesses to grow and create jobs," she said.
But Collins and Republicans were immediately criticized for approving a tax overhaul that will increase the federal deficit, tilt tax relief toward the wealthy and provide questionable economic growth. The bill was also attacked for including a number provisions unrelated to the tax code, including allowing drilling in the Arctic National Wildlife Refuge, repealing a key provision of the Affordable Care Act and other sweeteners designed get Republicans onboard.
In a statement, Maine Democratic Party Chairman Phil Bartlett said Collins let Mainers down.
“As a result of her disappointing decision, and that of Congressman Poliquin, middle-class people in Maine are likely to face higher health care costs and higher taxes — all so that the wealthiest can line their pockets with even more money."
Collins announced Friday that she had reached agreements to include several amendments to the bill. But critics of the overhaul are already saying the changes will do little to help her constituents.
Collins has mostly steered clear of the biggest criticisms of the bill: its secretive and rushed drafting process, a product that independent analyses show could jack up taxes on low- and middle-income earners over the next decade and a big corporate tax cut that will explode the federal deficit by another $1.5 trillion.
On Friday, as the GOP moved closer to wrangling the votes it needed to pass the bill, Collins declared she had won a series of concessions.
One of them will allow people to claim up to $10,000 of property taxes as a deduction on their federal returns.
She explained the importance of this provision to reporters during a forum on Thursday.
“I’ve had extensive discussions — extensive discussions — with administration officials and with the Senate leaders, and they understand that this is something I have to have in the bill,” Collins said.
And, now, it is. After hours of closed-door negotiations, Collins said GOP leaders agreed to support the amendment. But like other changes Collins has said are critical to winning her vote, analysts were quick to question their efficacy.
“This is a deduction that most people in Maine and around the country just aren’t going to be able to use,” said Carl Davis, the research director of the Institute on Taxation and Economic Policy, or ITEP, a Washington, D.C.-based think tank that has roundly criticized the GOP tax bill.
Davis said only 1 of 15 Maine households, about 6 percent, will benefit from the property tax deduction. That’s because the Senate bill wipes out the itemized deductions for state income taxes, meaning few households will have enough deductions left over to make it worth claiming the property tax deduction.
He said the same goes for lowering the threshold for the charitable deduction — another change Collins secured in the Senate bill.
“This has a lot more to do with improving the curb appeal of this plan than it does with actually improving the substance. When you add that $10,000 property tax deduction back in, this is a deduction that is going to be overwhelmingly used by higher-income people that already fare very well under the Senate bill,” Davis said.
Collins’ spokeswoman Annie Clark said the proposal will allow 166,000 Maine taxpayers who itemize to deduct a total of $725 million in property taxes each year — a claim based off IRS tax data from 2015.
Davis said the assertion is vastly overstated.
“It’s going to be radically smaller. Many fewer are going to get it. The people who do get it are going to be higher income. And a lot of people who get it are going to get a lot smaller benefit than they do today,” he said.
Clark said the ITEP analysis is inaccurate.
"Since the Senate bill doubles the standard deduction, many Mainers who currently itemize will choose this option rather than itemizing," she said in an email. "Inexplicably, ITEP claims it’s a bad thing that more Mainers will take the standard deduction, even though it will provide them with greater tax savings and dramatically simplify their tax filings."
In a statement, Collins touted the changes she had secured in the Senate bill, including deductions for unreimbursed health care costs.
She also said she reached an agreement with Senate Leader Mitch McConnell to pass two proposals designed to offset the elimination of the individual mandate that requires most Americans to buy health insurance.
But passage of the mandate repeal bills is doubtful. Some House Republicans, including the Freedom Caucus, have already said they won’t support it.
Collins and other Republicans are facing enormous pressure, both from donors and President Donald Trump, to pass the overhaul and to do it quickly.
“I said this yesterday on the floor: The Bangor City Council wouldn’t amend the leash law using this process,” said independent U.S. Sen. Angus King of Maine on MSNBC Friday morning.
King said the proposal is too big and too consequential to be rushed. He also cited a new analysis from the nonpartisan Joint Committee on Taxation that says the overhaul will add $1 trillion to the federal deficit while providing far less GDP growth than Republicans are promising — 0.8 percent.
“A couple of good summers can give us eight-tenths of GDP over 10 years. And all of this drama is about improvement in the economy that can only be termed marginal,” he said.
Criticism of the bill is only expected to increase. Passage of the Senate bill means that will need to be reconciled with a significantly different House bill. And that process could take at least a week — plenty of time for its multiple opponents to organize against it.
This story was originally published Dec. 1, 2017 at 4:33. p.m. ET.
