Senate Republican leaders are rushing to pass a tax bill that will ultimately raise taxes on many middle- and lower-income households and leave 13 million more people uninsured, to pay for permanent tax cuts for profitable corporations — the opposite of their claim that the bill will “strengthen the middle class.”

Republicans blame their choices on “the absurd rules of the Senate,” as White House Budget Director Mick Mulvaney asserted over the weekend. But that doesn’t make sense. The rules don’t force Senate Republicans to write the bill as they did. They chose to do so — and to prioritize permanent deep corporate tax cuts above all other concerns.

They chose, for example, to use a special legislative process (“reconciliation”) so the bill could pass the Senate with a bare majority — and no Democratic votes — rather than the 60 votes that most legislation requires. They also chose to set up the reconciliation process so that the tax bill could add $1.5 trillion to deficits over the first decade, 2018-2027.

Because Senate reconciliation rules prohibit the bill from adding to deficits after 2027, Republican leaders then faced another choice: set the entire bill to expire by the end of the decade, so there were no costs after 2027; revise it so that it pays for itself after ten years; or make certain priority tax cuts permanent and pay for them with other permanent measures that raise revenues or reduce program spending, while letting lower-priority tax-cut provisions expire. They chose the last approach. And they centered the bill around permanent corporate rate cuts and other tax cuts for multinationals.

Permanent corporate tax cuts. Consistent with President Trump’s only “non-negotiable” requirement — that the GOP tax plan dramatically cut corporate taxes — the Senate bill permanently cuts the corporate tax rate to 20 percent from 35 percent, costing more than $1.3 trillion over ten years. Another, less-noticed provision would permanently set an even lower tax rate for U.S.-based multinationals’ foreign profits by adopting a “territorial” tax system, which would encourage firms to shift profits and investment offshore. As Senate Republican Ron Johnson said recently, “With a territorial system, there will be a real incentive to keep manufacturing overseas.” Yet Senate Republican leaders chose to make this tax advantage for foreign profits one of their top priorities, along with lower corporate taxes generally. And the bill falls far short of containing enough corporate provisions that “broaden the base” and raise revenues to cover the cost of the bill’s deep, permanent corporate tax cuts.

Consistent with President Trump’s only “non-negotiable” requirement — that the GOP tax plan dramatically cut corporate taxes — the Senate bill permanently cuts the corporate tax rate to 20 percent from 35 percent, costing more than $1.3 trillion over ten years. Another, less-noticed provision would permanently set an even lower tax rate for U.S.-based multinationals’ profits by adopting a “territorial” tax system, which would encourage firms to shift profits and investment offshore. As Senate Republican Ron Johnson said recently, “With a territorial system, there will be a real incentive to keep manufacturing overseas.” Yet Senate Republican leaders chose to make this tax advantage for foreign profits one of their top priorities, along with lower corporate taxes generally. And the bill falls far short of containing enough corporate provisions that “broaden the base” and raise revenues to cover the cost of the bill’s deep, permanent corporate tax cuts. Permanent tax increase for middle-class and other households. In revising their bill, Senate Republican leaders set all of its tax cuts for individuals to expire after 2025 and all of its revenue-raising measures to expire except one: a slower inflation measure (the chained Consumer Price Index) for adjusting tax brackets and certain tax provisions each year to account for inflation. This permanent change would cause these key tax parameters to grow more slowly than they would under the current inflation measure — thereby pushing many taxpayers, including many middle-income taxpayers, into higher tax brackets than otherwise. This measure would raise taxes on households across the income scale, amounting to a $32 billion tax increase in 2027, the Joint Committee on Taxation estimates.

In revising their bill, Senate Republican leaders set all of its tax cuts for individuals to expire after 2025 and all of its revenue-raising measures to expire one: a slower inflation measure (the chained Consumer Price Index) for adjusting tax brackets and certain tax provisions each year to account for inflation. This permanent change would cause these key tax parameters to grow more slowly than they would under the current inflation measure — thereby pushing many taxpayers, including many middle-income taxpayers, into higher tax brackets than otherwise. This measure would raise taxes on households across the income scale, amounting to a $32 billion tax increase in 2027, the Joint Committee on Taxation estimates. Millions more uninsured. To help pay for permanent corporate tax cuts, Senate Republican leaders last week added a provision repealing the Affordable Care Act’s individual mandate (i.e., the requirement that most people enroll in health insurance coverage or pay a penalty). That would raise the number of uninsured Americans by 13 million by 2027, according to Congressional Budget Office estimates. It also would raise premiums in the individual insurance market by an average of 10 percent. All of the savings — $53 billion in 2027 — would result because fewer people would be insured, resulting in somewhat lower spending on Medicaid and premium tax credits. The bill would use the savings to finance its permanent corporate rate cuts.

Overall, in 2027 — when only the corporate tax cuts, slower inflation measure, and individual mandate repeal would remain in place — the Senate bill would, on average, raise taxes or reduce federal expenditures for households with incomes below $75,000 by about $60 billion — while still giving large tax reductions (through its corporate tax cuts) to those at the top. (See chart.)

So, contrary to Republican claims that byzantine Senate rules forced them to sunset the individual tax provisions, they were free to choose the structure of this bill at every stage, and they chose to write a bill that favors corporations over individuals, and high-income households over middle-class and working-poor households.