Conservatives slam plan to automatically raise taxes

Stephen Ohlemacher
Associated Press

Washington – Conservative groups and lawmakers are lining up against a proposal by Senate Republicans to impose automatic tax increases on millions of Americans — if their sweeping tax package doesn’t grow the economy and raise tax revenues as much as projected.

The opposition comes as the tax package cleared a key procedural vote in the Senate on Wednesday. The Senate voted 52-48 to start debating the bill. Wednesday’s vote potentially could pave the way for the Senate to pass the package later this week. The Senate could start voting on amendments Thursday evening.

Opposition to the tax “trigger” could doom a delicately negotiated proposal aimed at mollifying deficit hawks who worry that tax cuts for businesses and individuals could add trillions to the mounting national debt.

Tucking a potential tax increase into the tax cut bill isn’t sitting well with conservatives.

“Automatic tax increases are a special level of insanity,” said Rep. Trent Franks, R-Ariz. “I don’t think it survives.”

Rep. Jeb Hensarling, R-Texas, called the proposal “a uniquely bad idea,” especially if revenues fall short because of an unforeseen slowdown in the economy.

Rep. Mark Sanford, R-S.C., said the threat of an automatic tax increase would make businesses reluctant to invest.

“If businesses or individuals have no ability to plan on a rate, it makes an investment decision, for instance, very, very difficult,” Sanford said.

The proposal is being pushed by Republican Sens. Bob Corker of Tennessee, James Lankford of Oklahoma and Jeff Flake of Arizona. It is picking up steam in the GOP-controlled Senate, even if it could land with a thud in the GOP-controlled House.

Corker said he has received assurances from Republican Senate leaders and the White House that some sort of “trigger” would be added to the Senate package that would increase taxes if the economy doesn’t grow — and tax revenues don’t increase — as much as projected.

“While we are still working to finalize the details, I am encouraged by our discussions,” Corker said.

Senators are also considering a companion proposal from Sen. Ted Cruz, R-Texas, that would automatically cut taxes further if the economy grows faster than expected.

The overall package is a blend of generous tax cuts for businesses and more modest tax cuts for families and individuals.