Washington • Utah’s all-Republican federal delegation praised a GOP tax-reform bill unveiled Thursday, saying the legislation was the long-needed fix to a broken and unfair tax code that will help Americans keep more of their paychecks.
The bill, though, was soundly criticized by Democrats and some groups as a giveaway to corporations and the wealthy, who would see more of a benefit than middle-class taxpayers.
The House Republican bill would make sweeping changes to the tax code that hasn’t seen a major reform since 1986 by slashing the corporate tax rate, limiting the mortgage interest deduction and narrowing the number of tax brackets to three. The bill doubles the standard deduction and lessens the estate tax – dubbed the “death tax” by critics – and eventually jettisons that tax.
Sen. Orrin Hatch, who as Senate Finance Committee chairman will oversee tax reform efforts in his chamber, said he was studying the House legislation as he moves forward on a Senate version. But he praised the effort by House Republicans to tackle an issue that has been the third rail of politics because of how massive and contentious changing the tax code is.
“We’ve debated the best way to reform our tax code for decades, and we now have the opportunity to make history and bring our tax system into the 21st century,” Hatch said in a statement. “I’m confident that, as each chamber works its will and moves a bill through regular order, we can build on this momentum and produce a robust, pro-growth tax reform package that will deliver much-needed relief to the American people.”
The House legislation is expected to move quickly through the chamber. President Donald Trump said Thursday he wants to see a bill on his desk by Thanksgiving.
That’s likely a tough haul as opposition is expected from all Democrats and some Republicans from New York and New Jersey upset over a limit on state and local tax deductions. Homebuilders and real-estate interests have also come out against the legislation, as has an association of small businesses.
“Apparently Donald Trump wants to call this tax plan ‘The Cut Cut Cut Act.’ That’s appropriate because they’re cutting taxes for billionaires, cutting taxes for corporations, and cutting funding for Medicaid and Medicare to pay for it all,” said Frank Clemente, executive director of Americans for Tax Fairness. “In the meantime, some middle-class families will likely end up paying more in taxes because of the loss of popular deductions, while corporations will get a multi-trillion dollar windfall. It’s outrageous and immoral, and voters will hold them accountable for it.”
Republicans pushed back on that criticism with a long list of talking points aimed at showing that lower- and middle-class families would benefit and noting that the tax rate for the highest incomes remains the same. They also touted that the tax reform could allow most Americans to file their tax returns on a paper the size of a postcard.
“The only people that aren’t going to like this are H&R Block,” Trump said Thursday.
“For too long, hardworking Americans have suffered under a tax code that is too unfair, too complicated, and too expensive.” House Speaker Paul Ryan said. “That ends this year.”
Sen. Mike Lee, R-Utah, issued a joint statement with Sen. Marco Rubio, R-Fla., saying the House bill was an “important step in the process” of tax reform but it didn’t go far enough to help families.
“The best way to provide real relief to working families is through a straightforward, significant and permanent expansion of the child tax credit,” Lee and Rubio said. “We wish the House draft had done more on this front – preferably doubling the credit to $2,000 per child and expanding its applicability to payroll taxes. We look forward to working with our colleagues to make sure working families are moved to the front of the line in the Senate bill.”
Rep. Rob Bishop, R-Utah, said he would follow the progress of the bill but was happy with its rollout.
“Representative Bishop is pleased by the savings this bill could mean for families,” Bishop spokesman Lee Lonsberry said. “Utahns and all Americans deserve to keep more of their hard-earned money.”
Rep. Mia Love, R-Utah, said the bill would help working Utahns, create jobs and close loopholes for the rich. She backed the doubling of the standard deduction, a new family credit and the expansion of the child tax credit by $600 per kid.
“I’m excited that this will be accomplished by maintaining the mortgage interest and charitable deductions, and by allowing people to keep investing in their 401(k)s,” Love said. “This is the kind of progress that working Utahns deserve, and I will continue to work to defend their interests.”
The legislation does keep the write-off for charitable giving, though groups have raised concerns that with a doubled standard deduction, a sizable amount of Americans may no longer itemize deductions and have less of an incentive to donate money.
With Utah’s congressional special election only days away to replace former Rep. Jason Chaffetz, the candidates for the 3rd District seat disagreed about the new legislation and its impacts on Utah.
Democrat Kathie Allen noted the bill would add more than $1 trillion to the national debt in the next decade and was a “huge boon” to corporations and the wealthy.
“It’s nothing more than another repackaging of trickle-down economics,” Allen said in a statement. “The benefits, if any, to middle-class families will be offset in the long run by the increased federal debt we are leaving to our kids.”
Provo Mayor John Curtis, the Republican nominee, said he would support the GOP tax bill.
“I recognize that this bill is a starting point, and I know that there is a lot of work left to be done to ensure that this legislation best serves the needs of hardworking Utah families,” Curtis said. “I’m thrilled that this bill would let Utahns keep more of their own money with a significant, long-overdue, tax cut for middle-class families. … This bill gives tax relief to our job creators, both small and large, so they can create good-paying jobs and raise wages.”
Jim Bennett, son of the late Sen. Bob Bennett and the United Utah Party’s nominee, said the bill was a “decidedly mixed bag.”
“I applaud the lower corporate tax rate and the simplification of rates, but I have real concerns about the capping of the home mortgage deduction (at a $500,000 purchase) and the raising of the lowest rate from 10% to 12%, as well as the capping of the deductibility of state income taxes,” Bennett said. “Those measures will hit the middle class right between the eyes.”
Bennett said he would push back at parts of the bill that would hurt the 3rdDistrict and expressed concern that Republicans were intent on excluding Democrats from the process.
Reporter Courtney Tanner contributed to this story.