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GOP Senator: GOP Must 'Prove to America That We Can Govern' with Tax Reform

Sen. David Perdue (R-Ga.) makes his way to the Senate policy luncheon in the Capitol on Sept. 6, 2017. (Tom Williams/CQ Roll Call via AP Images)

Sen. David Perdue (R-Ga.) on Tuesday predicted that the GOP’s tax proposal can pass in the Senate without Democratic support, despite the fact that he questioned the allegiance of all 52 Republicans in the upper chamber.

“Absolutely,” Perdue said at the Heritage Foundation when asked about a potential block vote from Democrats at the urging of Senate Minority Leader Chuck Schumer (D-N.Y.). “I think the Republican Party has to decide and prove to America that we can govern. I think that’s the challenge before us. Yeah, it’s a thin margin; we have 52. Sometimes I wonder if we have 48 or 49, I’m not sure. But 52, and so they all vote independently.”

The Senate is made up of 52 Republicans, 46 Democrats and two independents. During the discussion, Perdue said that the pressure is even higher to pass tax reform, given Republicans’ failure to pass a repeal and replace of Obamacare, with key GOPs voting against the proposal.

Without pressure from Schumer, Perdue argued that there might be half a dozen Democrats willing to vote for the tax proposal. The Georgia senator noted that there are 10 Democratic senators running for re-election in red states, some states where President Trump won by 40 points.

Highlights of the GOP’s tax framework include cutting the corporate tax rate from about 35 percent to 20 percent, nearly doubling the standard deduction, increasing the Child Tax Credit and eliminating the estate tax. Democratic lawmakers have attacked the proposal to eliminate the estate tax, which Sen. Bernie Sanders (I-Vt.) has claimed will mean a $269 billion break for the nation’s top 0.2 percent.

Speaking on the Senate floor in September, Schumer claimed that the proposal would mean a 39 percent tax rate for middle-class families making between $100,000 and $300,000, but a 25 percent rate would be applied for the majority of income from hedge-fund managers, lawyers and whoever can manage to avoid corporate taxes via pass-throughs.

“Each of those proposals would result in a massive windfall for the wealthiest Americans and provide almost no relief to middle-class taxpayers who need it the most,” Schumer said. “It seems that President Trump and Republicans have designed their tax plan to be cheered in country clubs and corporate board rooms.”

Joshua Bolten, president and CEO of Business Roundtable and President George W. Bush’s White House chief of staff, defended the GOP proposal on Tuesday, citing a recent survey presented to the roundtable. The organization is a group of major U.S. corporate CEOs who lobby for business-friendly policies and includes members from AT&T, ExxonMobil, JPMorgan Chase and Mastercard, among others.

Bolten claimed that more than 75 percent of respondents said they will hire more people if tax reform goes through, and 82 percent said they would invest more in the U.S., including plants, equipment and capital infrastructure. At the same time, he said that if the tax plan fails to pass the majority of CEOs “have to take both planned hiring and capital investment off the books.”

“That will have a real impact on a real economy,” Bolten said.

Bolten, like many other Republicans, pointed to a “non-competitive” corporate tax rate in the U.S. Most businesses, he said, are subject to a total tax rate, between federal and state, around 39 percent. The average Organisation for Economic Co-operation and Development corporate tax rate is 23 percent, he said. For comparison, German companies pay between 30 and 33 percent in total taxes.

“Everybody else has moved ahead of us,” Bolten said.