On Tuesday, the House passed a tax reform plan with some tweaks.
But as the party moves into the second quarter of 2019, Republicans have made a major change to the bill and are facing serious concerns about how to make the plan effective.
A new Congressional Budget Office report released Monday shows that if the bill becomes law, the bill would slash tax rates for corporations and the wealthiest Americans by about $1,300, but raise taxes on the middle class by $2,400.
But that’s still far less than the $4,000 cut in the bill the White House is calling for.
It also says the bill is likely to raise taxes for many middle-class families by $300 to $600.
The Congressional Budget office’s findings are still subject to change, but the Republican bill would significantly raise taxes by about a third on most households.
That’s despite President Donald Trump’s promise to do something similar.
“There are a lot of small businesses that would be hit very hard by the Senate bill,” said Dan Pfeiffer, the chief economist at the nonpartisan Tax Policy Center.
“The Senate version would lower their rates substantially.
But it also would make it much more difficult for them to operate and hire and grow their businesses.”
The tax cuts would expire at the end of 2025, and House Speaker Paul Ryan, R-Wis., said in a statement that the GOP plan would keep the benefits of the plan for “millions of middle-income Americans, many of whom are the backbone of our economy.”
Republicans also announced that they would repeal a popular deduction for state and local taxes, which was part of the bill.
“It’s important to remember that our plan would have no impact on deductions for state, local, or property taxes, as those deductions have been repealed,” the statement said.
A lot of the changes made by the House plan would be on top of a Senate plan that was passed last year with little bipartisan support.
The bill includes $3.4 trillion in tax cuts, but only $1 trillion in revenue over 10 years.
“I think the Senate plan is going to do a lot more,” Pfeiffser said.
“My concern is that the bill has this enormous cost that it would put on the economy.
It’s going to make it difficult for small businesses, for households, for individuals, to make ends meet.”
But the Senate’s tax cuts are projected to bring in roughly $1.5 trillion in additional revenue over the next decade.
And the GOP bill is already being criticized for adding $300 billion to the deficit.
The CBO’s projections suggest the bill could increase the debt by $1 in 2026, $2.6 in 2027 and $5.4 in 2028, and add about $3 trillion to the national debt over that period.
In its statement, the GOP said it would not try to reduce the tax code by raising taxes on individuals and corporations, but would instead provide relief to households by increasing the standard deduction and the child tax credit, which would both be expanded.
Republicans say that the plan would also provide $1 billion in tax relief to businesses and individuals, and would provide an additional $500 billion to reduce deficit.
But the nonpartisan Congressional Budget Service, which has conducted analyses of tax proposals, has not yet released a full analysis of the Senate legislation, which also includes $1 and $10 trillion in economic growth offsets.
The nonpartisan Joint Committee on Taxation has been working on a detailed analysis of both plans.
Republicans also released a plan that included an increase in the child-care tax credit to $1 for families making less than $200,000 and $2 for families earning more than $250,000.
The proposal included a $1 million refundable tax credit for parents making up to $125,000 per child, a $2 million refundment for parents earning more.
Republicans have also been criticized for their plan to extend the Child Tax Credit for two years.
That would give parents who earn less than half of the poverty line $3,000 in tax credits.
Republicans said that the child credit is already a top priority in the tax plan, and they have said they plan to expand it to include additional assistance to parents making less.
But Pfeitters said the Child tax Credit extension is a big incentive for parents to make more child-related expenses, such as childcare, or to keep children in the home.
“These are all things that would help parents to stay in the workforce and pay for their children’s education,” he said.