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Democrats: GOP tax reform 'conducting a bank heist' against Treasury

Sen. Jeff Merkley speaks to KATU from Capitol Hill on Nov. 1, 2017. (SBG)

With the Republican tax reform bill finally set to be unveiled Thursday, members of both parties are still unsure what will be in it, but most seemed to already have firm opinions Wednesday on whether they expect to vote for it.

"Our goal is to move tax relief through the house by Thanksgiving and get it on the president's desk by Christmas," said Rep. Cathy McMorris Rodgers, House Republican Conference chairperson. "And we’re really excited about taking this on and what it means for every person in this country and then reaching their full potential."

McMorris Rodgers rejected criticisms of the bill as a gift to the wealthy that are already surfacing from Democrats.

"When you look at the focus of our package, it really is about hard working men and women in this country that have been doing all the right things, going to work every day, making their mortgage, paying for kids’ college, saving for retirement, we want to help them," she said.

According to House Republicans, that is exactly what their constituents want.

“When I travel around my district, people want tax relief,” said Rep. Darin LaHood, R-Ill. “Middle class folks feel like they’ve been left out over the last 20 years. They haven’t seen any increase in their wages, but they’ve seen their taxes go up.”

Although the House Ways and Means Committee is releasing the text of the bill Thursday, a framework GOP leaders put out last month would vastly simplify the tax code. Critics say it would also bestow about 80 percent of its benefits on the wealthiest tax payers, but LaHood maintained the Republican plan will give a boost to the middle class as well.

“We want to put more money in the pockets of average working people, the middle class,” he said. “More money for their children’s education, more money to save up for a mortgage, more money to buy a car, all those things, but in order to do that, we have to implement tax cuts.”

The proposed framework would get rid of most deductions while approximately doubling the standard deduction. Rep. Steve Pearce, R-N.M., expects some friction within the GOP over an effort to eliminate the state and local tax exemption.

“The larger states would like to have the exemption in,” he said. “Smaller states, the poorer states always are having to pay taxes to make up for that, so the differences are pretty significant.”

However, Pearce does not believe that will prove an insurmountable obstacle for a party committed to reducing taxes.

“At the end of the day, I think we’re all going to come together just to cut the business rate to where we can bring the manufacturing jobs back into the country,” he said. “Myself, I’m looking for the middle class tax cut and for small businesses.”

Other GOP lawmakers also say the middle class is their priority. Rep. Chuck Fleischmann, R-Tenn., bristled at the suggestion that the framework Republicans have released would overwhelmingly favor the wealthy.

“I want to see more money in the hands of all working Americans and I don’t want to see us be divided,” he said. “For too long, we’ve been divided on a lot of different issues. Let’s not divide Americans on what they earn, let’s incentivize Americans from all walks of life to go out and be able to be successful, make more money.”

Fleischmann also emphasized the importance of reducing the corporate tax rate to make businesses more competitive.

“I not only want to see jobs in America, I want to see corporations say I want my home to be in America,” he said.

Business owners say they want to see that as well. Alfredo Ortiz, president of the Job Creators Network, attended a meeting with President Trump Tuesday about tax reform, and he remains optimistic that lawmakers will be able to come together on at least tax cuts for the middle class and business owners, if not the wholesale structural change the president has promised.

“Anytime where we can reduce the amount of taxes that are in the hands of politicians in D.C.…from a business perspective, it’s a good day,” Ortiz said.

Polling conducted by his organization suggests money given back to businesses of any size will benefit their communities, creating jobs and stimulating economic activity.

“Small business owners will reinvest those dollars back into their business,” he said.

Ortiz believes the dozen or so Republicans who balked at the budget resolution out of concern about losing the state and local tax deduction will be won over by the package’s other provisions.

“My guess is that there’ll be some adjustment to what is originally proposed,” he said, such as retaining a property tax deduction or phasing out the current deduction over time.

Some moderate GOP senators have hesitated over the deficit and the distribution of the tax cuts, but Ortiz sees little for them to gain from killing the bill.

“I’m not sure if even the retiring senators want their legacy to be the ones that gave thumbs down to tax cuts for all Americans,” he said.

If Republicans can cobble together enough votes to get over the finish line, Ortiz even expects some Democrats to climb on board.

“Will they be the votes that push it over the 50 vote margin?” he said. “I don’t think so, but I think we’ll have some level of bipartisanship in the end.”

Senate Democrats do not share that confidence, and they doubt Senate Republicans truly do either since they intend to use the reconciliation process that requires no Democratic votes.

“Republicans in the Senate said, ‘We do not want a bipartisan process,’” Sen. Jeff Merkley, D-Ore., said. “They specifically passed a budget resolution so they could pass their bill with 50 votes and the vice president.”

He dismissed the Republican plan as “a giveaway almost entirely to the very richest Americans.” Some middle class families could end up paying higher taxes, according to many economists, despite Republican rhetoric.

“They’re having great difficulty deciding how they are going to try to fool the public,” Merkley said.

He insisted Democrats would embrace a tax plan that really does focus on the middle class.

“There’s obviously true reform that would help the middle class that we’d be happy to work with them on,” he said. “But right now, they’re saying, ‘No thanks, we’re conducting a bank heist, we don’t want your help, we know you’re not going to help us.’ And they’re right.”

Sen. Chris Van Hollen, D-Md., took issue with the secretive process, with Republicans leaving less than three weeks between the release of the bill and their goal of passing it through the House by Thanksgiving.

“The first thing I would say is the country really deserves to be part of this conversation as you put together a tax bill,” he said. “This has been put together behind closed doors.”

Van Hollen’s constituents would be among those most impacted by eliminating the state and local tax deductions.

“If they deny Marylanders and others the ability to deduct SALT taxes, middle class members are going to see their taxes go up in order to pay for tax breaks for the wealthy,” he said.

Democrats expressed concern about the impact the proposed cuts would have on the deficit because the wording of the budget resolution allows for up to $1.5 trillion worth of cuts that would not be paid for.

“We shouldn’t borrow money to get a tax cut,” said Sen. Ben Cardin, D-Md. “It should not increase the deficit, and by definition, they’re allowing a $1.5 trillion increase in our national debt under that tax bill. That should be eliminated.”

That is not to say Democrats have abandoned all hope of a bipartisan solution, at least not until the final text of the bill is released Thursday.

“What we do know about this is not good for the country,” Van Hollen said. “Maybe they’ll correct those in the next 24 hours before they unveil this thing.”

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