As it turns out, passing a tax bill that you didn’t read at 2 AM can have some nasty side effects. Even for the corporate donors you meant to help.
In the hasty process of assembling a 479-page bill (with no shortage of handwritten additions) and holding no committee hearings to review its contents, Senate Republicans inadvertently pissed off some of their biggest corporate donors with an overlooked provision that repealed billions in tax breaks many of them count on.
One of the more beloved corporate tax breaks Republicans killed in the dead of night was the research tax credit, which lobbying giants like the fossil fuel industry and pharmaceutical industry count on for billions of dollars in tax breaks each year. Robert Murray, the CEO of Murray Energy — the largest privately held coal company in America — told the Wall Street Journal that the bill passed by Senate Republicans will increase his company’s federal taxes by $60 million.
“What the Senate did, in their befuddled mess, is drove me out of business and then bragged about the fact that they got some tax reform passed,” Murray told the Journal. “This is not job creation. This is not stimulating income. This is driving a whole sector of our community into nonexistence.”
Another accidental corporate tax increase Republicans passed early Saturday morning involved the corporate alternative minimum tax. One of the cornerstones of the GOP’s tax plan is reducing the corporate tax rate from 35 percent to 20 percent. The current corporate alternative minimum tax is 20 percent, which forces corporations to pay at least 20 percent tax on profits (that don’t get stashed in tax-free overseas bank accounts) after claiming various deductions and credits.
However, as New York Magazine reported Monday, Senate Majority Leader Mitch McConnell forgot to reduce the corporate alternative minimum tax in the hastily assembled bill, meaning all of the new tax breaks they got from the bill were immediately rendered worthless.
“Companies can either take no deductions, and pay a 20 percent rate — or take lots of deductions … and pay a 20 percent rate,” wrote New York Magazine’s Eric Levitz.
House and Senate Republicans are expected to iron out the final details on legislation President Trump hopes to sign by the end of the year. The conference bill is expected to be negotiated behind closed doors with no input from Democratic lawmakers.
Michael Boone is a freelance journalist and columnist writing about politics, government, race, and media. He graduated from Texas Southern University’s School of Communication, and lives in Houston’s Third Ward.