Local Response to Tax Reform Bill Follows Party Lines
YOUNGSTOWN, Ohio – The region’s lawmakers largely responded along party lines Thursday to the release of a long-anticipated overhaul of the nation’s tax system.
The Tax Cuts & Jobs Act, promoted as the most significant reform to the tax code since 1986, was introduced in the U.S. House of Representatives by U.S. Rep. Kevin Brady, R-8 Texas, chairman of the House Ways and Means Committee (pictured above with House Speaker Paul Ryan).
Provisions include cutting the top rate for large corporations from 35% to 20%, phasing out the estate tax by 2024, eliminating the Alternative Minimum Tax, collapsing the number of brackets and reducing the mortgage interest deduction. READ SUMMARY of tax bill
U.S. Rep. Mike Kelly, R-3 Pa., who serves on Ways and Means, hailed the legislation as “the most monumental tax cut bill in a generation.” The bill was produced following more than 40 public hearings under three different chairmen over seven years, and he acknowledged there is more work ahead. The committee is scheduled to begin marking up the legislation Monday.
“This historic legislation means more take-home pay for every single hardworking American so that he and she can keep more of their hard-earned money to spend as they choose instead of shipping it off to the federal government,” Kelly said in a statement.
“It also means that American companies will no longer have to pay the highest taxes in the industrialized world. By sensibly lowering the corporate tax rate, our nation’s businesses can create more jobs, bring old jobs back, keep more jobs here, and fairly compete in the global marketplace.”
U.S. Rep. Tim Ryan, D-13 Ohio, countered that the tax legislation falls “far short” of the meaningful reform Americans were promised. Instead of fixing the nation’s tax system, the GOP tax plan “relies on the same supply-side, trickle-down economics that has failed in the past,” he said in a statement.
“Despite years of Republicans lecturing about fiscal responsibility, they readily admit that their plan will add $1.5 trillion to the national debt,” Ryan noted. “It gives huge tax cuts to wealthy elites — those who reaped the most benefit from our economic recovery — on the backs of a squeezed and struggling middle class. Most devastating for working-class Americans, the Republican plan will provide tax breaks for large corporations to move their operations overseas.”
U.S. Rep. Bill Johnson, R-6 Ohio, said the bill delivers “much-needed relief” to families across eastern and southeastern Ohio, and simplifies and makes the tax code fairer for all Americans. Acknowledging the legislation is “a work in progress,” he called its release “an important first step” in efforts to reform the tax code.
“The big winners in this bill are middle and lower-income Americans, as well as America’s small businesses that create nearly two-thirds of the jobs in our country. While the tax rate remains the same for the highest earners, it is reduced for nearly everyone else,” he said.
However, the National Federation of Independent Business, a conservative advocacy group, disagrees.
“This bill leaves too many small businesses behind.” said its president and CEO, Juanita Duggan. “We are concerned that the pass-through provision does not help most small businesses. Small business is the engine of the economy. We believe that tax reform should provide substantial relief to all small businesses, so they can reinvest their money, grow, and create jobs.”
The NFIB said it would work with Rep. Brady to make the necessary corrections so that the benefits of tax reform extend to all small businesses.
Ohio’s two U.S. senators, Rob Portman and Sherrod Brown, both of whom serve on the Senate Finance Committee, also weighed in on the legislation Thursday.
Portman, R-Ohio, commended Brady and House Speaker Paul Ryan for their efforts, and said he looks forward to reviewing the House plan as the Senate finalizes its proposal.
“The Senate Finance Committee has held 70 hearings on tax reform over the last five years, and I’m looking forward to a full debate and committee consideration of our proposal in the coming weeks,” he said. “It is now time to deliver results for the American people by reducing the tax burden on the middle class, helping American businesses grow and prosper, and creating better jobs and wages for our workers. We have a significant opportunity before us, and I’m optimistic we can get tax reform done.”
Brown, D-Ohio, issued a statement saying he is pleased that the legislation did not make changes to 401(k) contributions.
“Thank you to all those in Ohio and across the country who stood up and said ‘hell no’ to those in Washington who wanted to cut take home pay for working people and make it harder for them to save for retirement,” Brown said.
Brown said he and President Trump “agree that tax reform should put money back in the pockets of working Americans and make it easier for them to save,” and not provide tax cuts to corporations that outsource jobs.
“I hope he will work with me to do that in the Senate bill,” he said.
Brown has provided Trump with copies of his Working Families Tax Relief Act, which expands access to and increases the value of the Earned Income Tax Credit and Child Tax Credit, and his Patriot Employers Tax Credit, which he said would reward employers who keep jobs in the United States.
Brown said the president expressed his support for the proposals, which have “overwhelming support” from Senate Democrats, and would be key for bipartisan reform in the Senate.
Copyright 2023 The Business Journal, Youngstown, Ohio.