OLYMPIA — A tax overhaul plan drawn up by Republicans in Congress will be a good deal for many households though not every one, or nearly every one, as promised by its authors.
And over time, the number of those on the lower rungs of the nation’s salary ladder who benefit will shrink while the number of those at the top — as well as the largest corporations — will not.
It’s a trickle-down equation Democrats insist does not add up. But if computed with fewer variables and different integers, they argue it could result in a greater number of households saving a few dollars now and in the future.
That’s the point two wonky Democratic lawmakers from Washington have been trying to impress upon colleagues ahead of expected votes in the House Thursday Nov16 and in the Senate after Thanksgiving.
U.S. Rep. Suzan DelBene, whose district includes a swath of Snohomish County, and Sen. Maria Cantwell, sit on the tax-writing panels in their respective chambers. In separate hearings this past week, they sought to highlight the bill’s financial, and political, fault lines in questioning of Thomas Barthold, chief of staff for the nonpartisan Joint Committee on Taxation.
You cannot put this 250-plus page tax proposal in a nutshell.
The House and Senate bills would slash corporate tax rates and create new tax incentives for business owners. They also would double the standard deduction, which most Americans claim, while getting rid of deductions for college loans, medical expenses and moving costs. The bills limit or repeal the existing federal deduction for state and local property, income and sales taxes.
And Senate Republicans now want to add language repealing a requirement that Americans have health insurance, a mandate imposed in the federal health care overhaul known as Obamacare. The House bill does not contain a repeal
The Joint Committee on Taxation, or JCT, estimated how the Senate bill might pencil out for taxpayers.
Its analysis, as of Nov. 13, found 59.7 percent would see a tax decrease of at least $100 in 2019, and another 31 percent would see a tax change of less than $100 in either direction. Another 9.1 percent, or nearly 16 million households would pay at least $100 more in taxes. By 2027, 58.8 percent would see a decrease of at least $100, 29 percent would see a change of less than $100, and 12.1 percent, would see a tax increase of more than $100.
DelBene, in a House Ways and Means committee hearing last week, took aim at the bill’s disappearing deductions.
Barthold confirmed in questioning that teachers would no longer be able deduct up to $250 for what they spend on classroom needs while a business owner could continue writing off office expenses. And, she ascertained under the GOP plan, residents in her district won’t be able to write off sales tax on their purchases but a company can continue doing so.
“If a worker in my district had to move because his employer is forcing him to relocate his family or potentially lose his job, can he deduct his moving expenses under this plan?” DelBene asked Barthold in an excerpt reported by the Washington Post. No, he replied.
“But if a company, a corporation, decides to close its facilities in my district, fire its workers and move its operation to China, say, can it deduct associated moving expenses under this plan?” Yes, a company could deduct its moving cost, he said.
In the Senate hearing, Cantwell focused on the estimated 13.8 million households earning less than $200,000 a year — including 300,000 in Washington — who could see their taxes increase.
“A big chunk of this bill is being paid for on the backs of middle class families by taking away their deductions,” Cantwell said at the outset of the Senate Finance Committee hearing Monday. “This isn’t simplification of our tax code, it’s simply raising taxes on middle class families in my state.”
DelBene offered amendments to restore deductions and they were rejected. Cantwell is making a similar attempt this week. Her chances of success seem equally slim.
Republican leaders are hurrying the bills along in hopes of getting something passed this year. Democrats are hoping that as long as they show the numbers don’t add up then maybe the votes won’t either.
Jerry Cornfield: 360-352-8623; jcornfield @herald net.com. Twitter: @dospueblos.