Senate GOP Tax Bill Includes Bevy of New Perks in Bid for Votes

The state and local tax deduction cap and business provisions are headlining the $3.3 trillion giant GOP bill rolling toward Senate passage—but it’s smaller, more obscure breaks that are helping get it across the finish line.

Allies of Silicon Valley venture capitalists, Caribbean rum producers, Alaska whale captains, spaceport builders and hydrogen producers all had wins in the latest version of the Republican Senate’s giant tax-and-spending bill.

More is likely to come, as the legislation continues to morph ahead of an expected vote sometime on Monday. GOP senators had intense conversations on and off the Senate floor Saturday night, forging deals with leadership before voting to advance the package on a 51-49 vote.

As Congress’ annual legislating has become concentrated into fewer and larger bills, the practice of putting more member-introduced priorities into the legislation may accelerate, said Andrew Lautz, an associate director at the Bipartisan Policy Center.

And with such a massive bill, Lautz emphasized that every little provision in the legislation might not become clear until years from now.

“This is a 1000-page bill, and we are still trying to understand everything that’s in it,” he said. “This is going to affect every American in ways large and small in ways that we don’t know yet.”

The bulk of the revised bill extends and expands tax cuts enacted in the 2017 GOP tax law set to expire. But it also includes sweeteners for fence-sitters like Sen. Lisa Murkowski (R-Alaska), including a $40,000 increase to the amount Alaska whaling captains can treat as tax-deductible charitable contributions.

Senate Finance Committee Member Ron Johnson (R-Wisc.), who had criticized the legislation’s boost to the deficit, switched his “no” vote on the Senate floor after securing promises from GOP leadership to add more cuts.

Johnson, along with Sen. Mike Lee (R-Utah) another late holdout, told reporters Saturday evening they had an internal discussion about a strategy to achieve more savings, and more deficit reduction.

“We feel good about the direction,” Lee said.

Spaceport Provision

Other provisions added in the most recent Senate bill may have been aimed at securing support.

The bill includes relaxed Qualified Small Business Stock rules for venture capitalists and successful tech founders, which would allow them to avoid tax on billions of dollars in gains. The policy was proposed in a bill from Sen. John Cornyn (R-Texas).

The legislation also includes a proposal from former Sen. Marco Rubio (R-Fla.) allowing spaceports to issue tax-exempt bonds similar to the way airports and seaports issue them. Sen. Rick Scott (R-Fla.), a vocal supporter of the space industry, had been a holdout on the tax bill, though he finally voted on the motion to proceed to debate.

Sens. Shelly Moore Capito (R-W.Va.) and Jerry Moran (R-Kan.) were among lawmakers expressing concern when an earlier draft ended a hydrogen production credit this year. The latest version allows it to remain until 2028.

Legislation sponsored by Sen. Mitch McConnell (R-Ky.), exempting farmers from capital gains tax when selling land to buyers who commit to maintain agricultural production for at least 10 years, is also now in the bill.

It also incorporates a bill led by Sen. Bill Cassidy (R-La.) that permanently raises the rum cover-over excise tax cap on money sent to the Virgin Islands and Puerto Rico.

Sen. Thom Tillis (R-N.C.), was one of the two Republicans who voted no on the procedural vote Saturday, hours before announcing he’d retire at the end of his term Sunday.

Tillis expressed frustration that so many provisions tag along in the bill instead of being handled individually.

“The extremes freeze good policymaking,” Tillis said. “The leaders can only do so much. The broader membership also have to have a will to do it.”