Pence pushes tax overhaul in Oakland Co. visit

Ian Thibodeau, and Richard Burr
The Detroit News

Auburn Hills — Vice President Mike Pence promoted President Donald Trump’s tax reform plan Thursday in personal conversations with Michigan small business owners and in a campaign-style speech.

Pence said Trump’s plan will cut taxes for working families, make it easier for people to file their taxes and give small businesses the same sort of breaks it gives large corporations. He promised the rate reduction would allow U.S. manufacturing to continue to thrive.

“With your help, with the support of Michigan’s leaders in Congress, and with the leadership of President Trump, I say with confidence: Before we get to Christmas of this year, we’re going to pass the largest tax cut in American history, and we’re going to get America growing again,” Pence said at an Auburn Hills facility of Detroit-based American Axle Manufacturing.

Passing the tax overhaul will require support from Democrats in the Republican-controlled U.S. Senate, so the vice president used part of the nearly 20-minute speech to target U.S. Sen. Debbie Stabenow. The Lansing Democrat, who is running for re-election in 2018 in a state that Trump won in 2016, has criticized the tax reform framework as benefiting the wealthy.

“It doesn’t have to be a partisan issue,” Pence said, pausing for applause. “Call both of your senators, especially Sen. Stabenow, and tell her Michigan needs a tax cut, and Michigan needs it now.”

In a Wednesday statement, Stabenow said she supported the goals of putting more money in families’ pockets, making the tax code simpler and helping small businesses.

“I am concerned that today’s proposal would give most of the benefits to those at the top and would take away important tax incentives for Michigan manufacturers,” she said. “As we work on reform in the coming months, the bottom line for me is that any reform must be bipartisan, help Michigan families and create Michigan jobs.”

Trump and Republican congressional tax writers released Wednesday a proposal in which the current income tax system of seven rates would be reduced to three: 12 percent, 25 percent and 35 percent. The bottom rate rises from the existing 10 percent and the top rate falls from the current 39.6 percent.

The child tax deduction would be increased and the standard deduction would be doubled.

On the business side, the corporate tax rate would drop from 35 percent to 20 percent, while the estate and alternative minimum taxes would be eliminated. The aim is to increase jobs and bring employment back from overseas.

“President Trump’s tax-cut plan will empower American companies and workers to compete on a level playing field with anyone, anywhere, anytime and — as Michigan proves every day — when the field is level, American workers always win,” Pence said.

The vice president also promised that Trump and the Republican-led Congress would repeal and replace the Affordable Care Act before the end of 2018, following the Senate’s failure this week to get enough votes for such a plan.

“The president said we’re disappointed that every single Democrat and a few Republicans weren’t ready to repeal and replace Obamacare, but we’re going to get it done,” Pence said. “Here in Michigan, Obamacare has increased premiums on the individual market by 90 percent in just the past four years. Next year, nationwide premiums are expected to spike again by 26 percent. Michigan knows the truth; Obamacare has failed and Obamacare must go.”

Michigan’s congressional Democrats this week blamed the Trump administration for part of the expected nearly 28 percent average increase in premiums next year for health plans required under the federal health law. The state attributes the large hike to uncertainty over whether the Trump administration will continue a subsidy to insurers.

Prior to the speech, Pence was joined by Gov. Rick Snyder and solicited stories of tax woes from 10 Michigan business owners and family members. They talked at circular tables in an American Axle break room.

The common theme among the handpicked small business owners was that the cost of filing taxes is too much, varying from $5,000 to $6,000 a year.

Jim Thienel of Berkeley Appliance, who employs six workers in Oakland County, told Pence his tax preparation bill is $5,000.

“If you reduce the cost, it saves us money,” said Thienel, a former Oakland County Republican chairman. “That’s a lot of money. I’d like to reinvest in my company,” adding he would like to buy another truck.

Pence said the plan would make tax filing easier.

“We think with this reform you could do your taxes literally on this,” the vice president said, holding up a large index card.

The speech echoed many points Trump hit when he visited Michigan in March. The president repeated his calls for foreign and domestic auto companies to build more U.S. factories, make more products domestically and create more jobs for Americans.

During his remarks Thursday, Pence said Trump will be the “best friend” U.S. manufacturing has ever had.

“This tax plan will put job makers like American Axle back on the road to success,” he said. “(It will) put more money in the American people’s pockets.”

American Axle closed its Detroit plant several years ago, blaming high labor costs and other competitive pressures. The Detroit-based drivetrain and axle parts maker now has 96 facilities worldwide, according to the company, with nine manufacturing facilities in Mexico and 20 facilities in Michigan including in Auburn Hills, Warren and Three Rivers. It also lists factories in Illinois, Alabama, Wisconsin, Arkansas, Indiana, North Carolina and South Carolina.

Pence’s speech sounded good to Christopher Niehoff, a machinist at American Axle who said he wants a tax cut for himself and business to keep the economy growing.

But the key is for Trump and Congress to keep the tax reform promise and get it signed into law, he said after the address.

“I think it’s going to put more money in my pocket,” Niehoff said. “We need it to happen.”

Eugene Zabrzenski, a steel forger at American Axle, said he hopes Trump and Pence can repeal and replace the Affordable Care Act and pass tax reform. But he said he is worried about the stalemate in Congress.

“Everybody’s butting heads about it,” Zabrzenski said.

He said the plan might not benefit himself but it would help his sister and her family “who have been struggling.”

This marks the second trip to Michigan by the vice president since he took office in mid-January. On Wednesday evening, Pence attended a fundraising dinner for the Michigan Republican Party at the home of Phillip and Lauren Fisher in a wooded neighborhood of Bloomfield Hills. A state GOP spokeswoman would not disclose how much money was raised.

Before Pence spoke Thursday, Mandy McClure, Democratic National Committee Midwest press secretary, said in a statement that the “reform plan that is nothing more than a thinly veiled giveaway to big corporations and the 1 percent.”

“We won’t know the specifics of the plan until the last minute, because Donald Trump, Mike Pence and their Republican colleagues know that if they’re honest about what’s in their tax plan, Americans will oppose it,” she said in the statement. “We saw this intentional secrecy with health care, and now we’re seeing it with tax reform.”

On Wednesday, Michigan’s congressional Democrats criticized the GOP plan as giving the biggest tax cuts to the wealthiest Americans at the expense of the less affluent. Michigan’s Republicans said the tax plan would allow middle-class families to take home more money and help businesses to create jobs, saying it’s been more than 30 years since the last major overhaul.

After Thursday’s speech, Pence went to Wisconsin where he visited a factory and discussed tax reform with other business owners and families.

Twitter: @Ian_Thibodeau