Nov 28, 2017

What Flake is thinking about the tax bill

Caitlin Owens, author of Vitals

Sen. Jeff Flake is a key vote on the tax bill. Photo: Bob Christie/AP

Sen. Jeff Flake, a key vote on the Senate tax bill, says he hates the budget “gimmicks" used to keep the bill from increasing the deficit by more than the $1.5 trillion limit. He also doesn't really buy the narrative that tanking the tax bill would throw the Republican party over a cliff.

Why it matters: While other Senate Republicans have similar concerns, Flake isn't running for reelection and has been openly critical of his own party. It's going to be much harder to twist his arm than it will be for other senators. He really wants to do tax reform, especially on the corporate side, but his vote seems truly up in the air.

The big takeaway: He thinks the bill resorts to “gimmicks" like ending newly granted tax breaks, when no one really believes they will be ended.

Key quote: "I still have concerns, but I obviously want – we need, we are not competitive with our tax code. The corporate rate, in particular. And we need to address that. So I certainly see the need, but I also want to do it in a fiscally responsible manner."

Highlights from our interview:

You're one of the members who are a bit of a wild card on this tax bill. Obviously debt is big to you. And then there's also this narrative, if this bill fails, Republicans are going to fall off the cliff. What's going on in your head as you're weighing which direction to go with this? Do you even believe that narrative?

"I don't know. Maybe less so than some do."

Well ,you've also been pretty hard on your party recently.

“This isn't the last train out of the station on tax reform. And there are some Democrats who would work with us…that's why I maybe don't have the same alarm. That, and I'm not up for reelection."

When you're thinking about debt, this bill scores as adding $1.5 trillion almost over 10 years. I know there's dynamic scoring, but what's acceptable to you?

"The $1.5 [trillion] is acceptable. I think you just have to get 1.4 percent economic growth. We can get that ... So I'm there. I'm just trying to make sure some of the gimmicks that we typically use, we deal with honestly. Like expensing, things like that."

If you're there, if you think the $1.5 trillion isn't a problem, what is the problem? Why aren't you a yes?

"That $1.5 [trillion] assumes that some of the other things, like for example, I'm focused on – this is just one of my concerns – but we have full expensing, it's one of the most stimulative aspects, allowing companies to fully expense from year one. To fit that in the budget window, to make sure we're still under the 1.5, we assume that that sunsets in five years. No one really believes it's going to sunset in five years."

"So we're looking at ways to deal with that honestly. So that 1.5 assumes that some of these gimmicks actually work, or aren't just gimmicks."

So you want it to be a more honest bill? So then it'd actually be 1.5 instead of something more once you keep extending it?

"That's right. That's what we're doing. And you can never get a perfect bill. We've got to get economic growth. I wish we could have a bipartisan bill from the get-go, I really do."

Is that something that would ever cause you to vote no? The hope of doing this in a bipartisan way?

"I don't know. I'm trying to get this bill on its merits to be worthy of support. I'm a supply sider. I do believe if you cut certain taxes, you can get economic growth."

What do you think of the sunsetting of the individual rate?

"Yeah, that's one of the gimmicks I talked about. But others will make the point that you never go 10 years without addressing some of this anyway. There's something to be said for that."

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