Senator Ron Johnson (R-WI) just became the first Republican to officially declare that he will not support the GOP tax bill that the White House still hopes to pass before Christmas. Speaking to the Wall Street Journal, Johnson said that his opposition stems from his view that the bill unfairly benefits corporations over other pass-through entities like S-Corps and LLCs.
“If they can pass it without me, let them,” Mr. Johnson said in an interview Wednesday. “I’m not going to vote for this tax package.”
“I don’t like that process,” Mr. Johnson said. “I find it pretty offensive, personally.”
Mr. Johnson said Republican plans prioritize corporations over “pass-through” entities—sole proprietorships, partnerships, limited liability companies and S Corporations—whose owners pay taxes through individual returns and at individual income-tax rates, rather than corporate rates. The Senate plan, like the House plan, proposes to cut the corporate rate from 35% to 20%.
Top rates for pass-through filers would remain over 30% in the Senate version of the bill and the House bill substantially constrains how much pass-through income could be taxed at a new 25% rate.
"I have no problems in making all American businesses competitive globally,” Mr. 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.”
Of course, Republicans have a narrow path to clearing their tax plan through the Senate as they can only afford to lose two GOP senators and still let Vice President Pence break a tie.
Of course, other Senate Republicans have also expressed concerns including Jeff Flake (R-AZ), Susan Collins (R-ME) and John McCain (R-AZ). As you'll undoubtedly recall, McCain is the same Senator that cast the decided vote to crush the Obamacare repeal effort earlier this year, a key component of which has now been lumped into the tax bill via language designed to repeal the insurance coverage mandate in the Affordable Care Act.
Not surprisingly, both the S&P...
...and USD expressed their displeasure with Johnson's announcement.
The question now becomes whether or not Johnson's public opposition will open the floodgates for other GOP senators to express their concerns as well.