Lawmakers who represent the Commonwealth in Washington are engaged in a fierce debate over tax reform.
With President Trump in the White House, Republicans on Capitol Hill are promising to get the nation’s economy chugging by slashing taxes. One of the ideas they’re pushing is to simplify the tax code. One way they seek to do that is by ending taxes on the first twenty five thousand dollars a family earns. The current threshold sits at just under $13,000.
Virginia Republican Dave Brat says that will be felt by middle class families.
“When you lowering the rate across the board, I think everyone do the simple math right up front, is you’re lowering the rates for everybody and you have a $25,000 deduction. So that’s right off the bat you’re in pretty good shape.”
The GOP is still hammering out the final version of the bill, so Brat is pushing his party leaders to enlarge what families can deduct for having children.
“It’s a big deal. We’re kind of pro-family folks, so if you’ve got a bunch of kids – hey, that’s a big deal.”
But Democrats accuse the GOP of using voodoo economics. Virginia Senator Tim Kaine says the GOP math doesn’t add up because they’re just shuffling deductions around that will hit average families hard.
“The doubling of the standard deduction but the elimination of personal exemptions sacks you if you have more than one kid, so it’s kind of like the tax version of China’s one-child policy. Why do you want to punish people with big families? I don’t get that.”
Virginia’s senior Democratic Senator, Mark Warner had hoped to be a part of negotiations on tax reform, but the GOP is trying to pass a bill without any input from Democrats. Warner says while he hoped to be at the table, he doesn’t like what he’s seen so far.
“I think it didn’t pass the smell test.”
The Tax Policy Center analyzed the GOP proposal and reports under it the wealthiest 1% of Americans make out the best, while 28% of middle class workers would actually see a tax increase. The Committee for a Responsible Federal Budget also reports it would increase the deficit by more than $2 trillion. Warner says that’s unacceptable.
“It increases the deficit by a large amount. I think the history of having unpaid-for tax cuts with borrowed money doesn’t end up with a good result.”
Warner offers some examples.
“President Reagan tried; he had to come back and raise taxes. You saw President Bush tried; we ended up with amazing deficits, we’re now sitting on $20 trillion in debt. You add this up with unpaid-tax cuts on top of the $20 trillion in debt, interest rates go up and debt servers alone will squeeze out all the discretionary spending.”
But the GOP faces an uphill battle. The party is still reeling from failing to carry through on its promise to repeal Obamacare. In the end if the Senate was able to pass anything with the bare minimum votes, House Republicans felt they would have been left with two options: Take it or leave it. That’s because the Senate likely couldn’t pass a health bill twice.
That has Virginia Republican Morgan Griffith demanding that his party leaders go through regular order on tax reform and hold formal meetings with their House counterparts on this massive overhaul of the U.S. economy.
“I want time to do a conference committee, to follow the proper procedures, because I don’t know whether I’m going to agree 100% on the Senate. So let’s do it the way that it’s laid out, and make sure there is plenty of time, you know, deadline three days later, take it or leave it, and let’s do a conference committee report, and let’s get both sides of the House and the Senate working towards something that will really benefit the American people.”
The effort to overhaul the nation’s tax code is testing the GOP’s ability to govern. Some Republicans are predicting voters will punish them if they fail to carry through on another campaign pledge, while Democrats are warning them they’ll be punished if they rush through a hyper-partisan bill that impacts every American.