I know that if there had been 60 yea votes for Trump's Tax Reform (Byrd Rule), that regular people would have also had their tax cuts made permanent along with corporations. What I want to know, instead, could the people's tax cut have been made permanent, while corporations were not, and then a new bill such as Senator Ted Cruz's has proposed to make the cut permanent? Also, was there a reason that one was made permanent and the other was not, or how was it decide which would be?


The reasons that corporation tax cuts are permanent and personal ones aren't is math. Corporations don't pay that much tax compared to total revenue, so cutting them even by significant amounts doesn't create a significant change. Personal income taxes on the other hand is the largest source of revenue for the government so even small changes have a significant impact.

The Byrd Rule would prevent permanent changes to personal income tax cuts because its basically impossible for them to not be considered significant according to how these calculations are done. Corporate income taxes aren't enough to actually trigger this so they could be made permanent. A future bill could make the cuts permanent, but that would require 60 votes which is not possible given the current environment of obstruction and refusing to compromise.

None of this really matters beyond creating political talking points. The system used to calculate increases/decreases in deficits isn't really grounded in reality to start with, and changes will happen that make any predictions totally irrelevant anyway well before a 10 year time frame is met.

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  • Actually it's a bit of politics. No one wants the taxes to be raised on middle class people so extending them could be easy to accomplish so no reason to make them permanent. Corporate taxes were made permanent so they can't expire, democrats would have to vote to (Noooo!) raise taxes which plays into the Republicans hands of no taxes for anyone - Democrats can never raise them or the fact that they increases taxes will be used against them in the future. – Hannover Fist Jan 18 '18 at 20:05
  • @HannoverFist It gives political points both ways, making corporate taxes permanent makes you look like you favor them over people. It also doesn't really affect that much because almost every president in recent history signed significant changes to tax law. – Ryathal Jan 18 '18 at 20:14
  • This is a bit circular. The reason why corporations don't pay much of the total incoming revenues is because their taxes are low due to previous cuts. So claiming that it's easier to cut theirs because they don't contribute as much because they've already had tax cuts before..... that's more the goal than the reason. nbcnews.com/id/29861648/ns/politics-capitol_hill/t/… – PoloHoleSet Jan 18 '18 at 22:58
  • @PoloHoleSet its not circular. The reason corporations don't pay much in total tax is because most every economist agrees taxing corps is inefficient. Its also low because big corps aren't a major part of the economy if you only look at the balance sheet. the sheer number of small and midsize businesses combine to overwhelm them in terms of economic activity and most of it get taxed through personal income. – Ryathal Jan 19 '18 at 13:07
  • @Ryathal - did you bother looking at the link? Corporations and business taxes used to contribute a lot more in terms of share of overall tax revenue. That was reduced through changes that were based on supply-side concepts. The reason why they don't pay as much is because the laws changed to tax them less. Whether you agree that it's the wisest way or not, now claiming that it's because of their share of incoming revenue, when incoming revenue is something that gets set by tax policy, is completely circular. – PoloHoleSet Jan 19 '18 at 16:07

You ask several questions. Some answers

  1. They could have done it the other way around if they wanted.
  2. Yes, a subsequent bill with 60 votes in the Senate could make the currently temporary tax cuts permanent. In fact, that's the stated plan. Someday.
  3. The reason they did it this way is that they don't believe there are 60 votes for a permanent corporate tax cut. So they made the unpopular changes (tax increases and tax cuts for unsympathetic recipients) permanent and made the popular changes temporary with the idea that they would later fix the popular changes.

    This was in large part a response to what happened with the "Bush" tax cuts. They were passed via reconciliation and 75% of them were made permanent. But 25% were not. They don't want their tax cuts to disappear like that again. They are confident that they can get 60 votes whenever necessary for the tax cuts that were temporary.

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