First Republican Senator Announces Opposition To Tax Reform

Ron Johnson (Photo by Alex Wong/Getty Images)

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Thomas Phippen Associate Editor
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Wisconsin Republican Sen. Ron Johnson announced he will not support the Senate’s version of tax reform, telling the Wall Street Journal that the plan will benefit corporations over small businesses.

“If they can pass it without me, let them,” Johnson told WSJ in an interview. “I’m not going to vote for this tax package.”

Johnson is the first Republican senator to oppose the plan, and his no vote could imperil the tax reform plan championed by the White House. Other Republican senators have voiced concerns over the bill, including Sens. Jeff Flake, Bob Corker, John McCain, Lisa Murkowski and Susan Collins. Republicans can only afford to lose three GOP votes.

Specifically, Johnson believes the current proposal to reduce the corporate tax rate from 35 percent to 20 percent, while the rate for pass-through businesses — like sole proprietorships, limited liability companies and sole proprietorships — would remain above 30 percent in the Senate version of the bill. Profits on corporations are taxed twice, once as corporate taxes, and again when shareholders get their profits. Pass-through businesses are taxed once when the owner is paid, at 39.6 under current law.

“I have no problems in making all American businesses competitive globally,” Johnson said. “This isn’t anti-big corporation at all. When you’re going to do a tax reform, you have to treat them equitably so they can maintain their competitive position here at home as we’re making them competitive globally.”

Johnson said he has been trying to push a plan that would treat all businesses like pass-through businesses on the tax code, but has not been able to convince the committees to advance his proposal.

The entire process for tax reform has concealed the nature of the proposal from the public, according to Johnson. “I don’t like that process,” Mr. Johnson said. “I find it pretty offensive, personally.”

“Back when it wasn’t too late it was just too big a bite and we can’t really chew it,” Johnson said of when he tried to raise the issue earlier this fall. “Now it’s just too late. It’s not like I’m just coming out of the woodwork all of a sudden raising it. I’ve been talking to my colleagues a long time. I presented my idea months ago.”

Some Republicans are concerned that if they don’t pass tax reform, GOP donors will pull their support. “My donors are basically saying, ‘Get it done or don’t ever call me again,'” Republican New York Rep. Chris Collins said. South Carolina Sen. Lindsey Graham told the New York Times that “the financial contributions will stop” if tax reform fails.

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Thomas Phippen