Our top story a midday edition the Senate may vote on the Republican tax reform bill as soon as this week's been approved by the finance committee and President Donald Trump says he's working to get the votes from several GOP senators. Those senators are not the only ones who have reservations about the tax bill in the current form. Sending a regional chamfer -- Chamber of Commerce and even though businesses could benefit from two tax reform, the current bills don't get us there. Joining me is Sean Karafin , vice president of policy and economic research, San Diego Regional Chamber of Commerce. Welcome. Thank you. The U.S. Chamber of Commerce is pushing hard for this tax reform measure to go they claim that many businesses would increase hiring if it passes. Why is the San Diego chamber reluctant about these bills? It is not in its final form. The U.S. chamber come out desk he met with principles and they supported the principles. There were two specific callouts. I think that really represents our economy here in San Diego and how it differs from the U.S. economy. Two deductions are very important to our region and our economy are businesses. The first is the cap on the mortgage interest deduction and it penalizes putting a cap on that reduction of high cost areas. Here in San Diego the used to be a rule. You should not spend more than 30% on your income and housing. 30% are spending over that. They are spreading more. We have a huge housing problem in crisis here. There is a discussion about a particular policy. It's going to impact San Diego more than the rest of the nation. Also you have a problem with the ending the state and local tax deduction, is that right? That is true. The truth is we are high cost of living area. That means when we have our income checks come in, we don't even see the state taxes. We are not bringing that into the house with budgets. The reality is the federal government with taxes on those dollars. It's double taxation and it's really going to impact areas like California that have high state income taxes more than other areas. It is a big issue for sending us economy. If they were removed on the tax deduction and the interest rate deduction, with the local chamber support the tax reform measure? If those are the only two things that change, I think would be close. This other problems as well including healthcare. They have eliminated the individual mandate to purchase healthcare. Through some murky math they decided that this has a particular impact and they try to take the dollars that the state and spend it in other ways. What is happening is they are trying to have true tax reform, but in the process you would end up with a lot of winners and losers. They are bound to this one $.5 trillion number. They can't put taxes over $1.5 trillion for the next 10 years and because of that, we're finding out that you can cut taxes and you still have winners and losers. In this case San Diego and something a loser. One of the major sector is biotech, which relies on well-educated researchers. Most students get their tuition paid for by their universities. This tax plan would charge taxes on that tuition, which would make people making $30,000 a year pay taxes on as much as $70,000 a year. What impact you see that having on San Diego? That is huge. San Diego has an innovation economy. This is where we've chosen to focus as a people promoting business in San Diego and economic development in San Diego. We've tried to attract these careers because we want those high wage jobs. It's very similar to eliminating the state and local tax deduction because it is money that we never seen our paychecks but the federal government is choosing to see as income and taxing us on it. It's really not logical but because they are bound by these rules, they are trying to find everywhere they can to give somebody else a reason to vote for it and it's really resulting in San Diego being a loser. Do you see any local winners in the current version of the tax plan? Not really. In San Diego, it's really not working out for many of our businesses. I will say that the -- may work for a lot of small businesses but not for every small this is. That could help a lot better pay more under the personal taxes but the smallest businesses that can increase the tax rate for them as well. So there are some winners, but overall this is really a big shakeup. The local chamber led a delegation to Washington DC earlier this year to lobby for San Diego. Are you seeing any benefits from that visit in this tax debate over the tax reform bill? Not so much. We try to focus those on issues that are very specific to San Diego. We did talk about higher education workforce to Bowman dollars. We lobby for homelessness dollars. Border is a huge issue. Those trips are really about building relationships so that when these types of issues come up, we have that direct line with our representatives in Washington DC and definitely lose those and we've talked even Republicans in our area are split on the issue and we know that this message is being told even by the U.S. chamber when they talk about the state and local deduction, they try to paint this as not just a red versus blue state type district policy. But Republicans and Democrats alike are going to be hit hard by the state local deduction. There are people looking at this on both side of the isles we are seeing that the Congress and this administration needs tax reform the past so badly that it really doesn't matter what the effects of this bill might the. That is a politics question. Republicans in DC know that they need to show progress. I can only look at this and ask a question what is this to the San Diego or for San Diego businesses, wages, employment. When I ask those questions consistently, the only answer is that it's going to hurt our economy. I've been speaking with Sean Karafin, vice president of policy and economic research, San Diego Regional Chamber of Commerce. Thank you. Thank you so much for having me.
President Trump boasted earlier this month that Republicans were working together to pass sweeping tax cuts in the waning weeks of 2017.
"We're working to give the American people a giant tax cut for Christmas," Trump said. "We are giving them a big, beautiful Christmas present in the form of a tremendous tax cut."
But first, GOP lawmakers will have to resolve some major policy differences that could derail the bill.
Senate Republicans hope to hold a vote on their version of tax legislation soon after they return to Washington from a week-long Thanksgiving break. If the bill passes, the Senate plans to combine their legislation with a different tax overhaul that passed the House earlier this month.
GOP leaders say they are confident that they have the votes to meet that goal. Here are a few of the major hurdles that could get in the way of the GOP plan to keep Trump's promise for a Christmas tax break.
1. Senate Republicans can only afford to lose two votes. Republicans plan to take advantage of special Senate budget rules that allow them to pass certain tax measures with just 51 votes, rather than the 60 needed for most other legislation. That means the 52 Senate Republicans could pass a tax overhaul without the help of any Democrats.
No Democrats are expected to vote for the bill, meaning GOP leaders need to keep their party unified if they want to quickly pass the legislation.
2. Tax cuts for small businesses. Wisconsin Sen. Ron Johnson is the only Republican who has officially come out against the latest version of the tax plan. He says big corporations get the majority of benefits while small businesses get left on the sidelines. The current Senate bill would slash the top corporate rate from 35 to 20 percent and many small businesses would be able to pay at a rate of 25 percent.
Johnson says he is working on making some changes to the legislation that could eventually allow him to vote for the tax overhaul.
"In the current form, I wouldn't vote for it," Johnson said in a recent interview on CNBC's Squawk Box. "I want to get this thing fixed, and vote for pro-growth tax reform that makes all American businesses competitive globally."
3. Big tax breaks could mean big deficits. Republicans have been working around the clock to rein in the cost of cutting taxes on most individuals and businesses. The same Senate budget rules say the bill can add as much as $1.5 trillion to the deficit over a decade but some conservatives worry the true price tag could be much higher.
Sen. Bob Corker, R-Tenn., is among those who have said he won't support any tax legislation that adds to the deficit in the long-run. Corker hasn't explicitly said that he would vote against the legislation but he has not decided if he will vote for it either.
Deficit hawks have criticized the Senate legislation for disguising the long-term costs of the bill by allowing cuts on the individual side to expire in 2025. Short-term tax cuts would cost the government less in the long run, but only if they actually expire.
Republicans say they hope a future Congress will decide to keep the tax cuts in place, potentially creating a major political showdown in eight years.
4. Health care could get in the way. The Senate legislation would effectively eliminate the individual mandate requirement in the Affordable Care Act. That provision was added to the bill at Trump's request, but it could alienate some Republicans who don't want to mix health care with taxes.
Sen. Susan Collins, R-Maine, has said she doesn't think it is wise to combine taxes and health care at this time. She and other moderate Republicans worry that ending the individual mandate could drive up health insurance premiums. A recent study from the non-partisan Congressional Budget Office found that ending the requirement would result in roughly 13 million fewer people with coverage over a decade.
5. Drilling for oil in Alaska. The tax bill is full of sweeteners for individual senators, including one that would open up drilling rights in the Arctic National Wildlife Refuge in Alaska, also known as ANWR. That measure is a direct appeal to Sen. Lisa Murkowski, R-Alaska, who has been skeptical of some other measures in the bill. Murkowski has spent much of her career advocating for those drilling rights.
But other Republicans, including Arizona Sen. John McCain, worry new drilling could harm the animals and sensitive environment the refuge was intended to protect.
6. People love their favorite tax breaks. Republicans want to end, cap or change many popular write-offs that are included in the current tax code, including breaks for mortgage interest, charitable giving, student loans and taxes paid to state and local governments.
Republicans say most people won't need those deductions, thanks to lower tax rates and a plan to double the standard deduction taken by most people. But Democrats say the legislation is set up to favor big businesses with corporate rate cuts while allowing middle-class benefits to expire.
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