GOP clash with Democrats on tax compromise benefits

Keith Laing, and Sarah Rahal
The Detroit News

Washington — An average single Michiganian will save about $1,200 per year and a typical family will save around $3,000 under a tax reform bill that is heading toward passage in Congress, according to Republican U.S. House members from Michigan.

House and Senate lawmakers unveiled a 1,097 page-compromise version of the legislation on Friday. Backers said the measure would lower individual and corporate tax rates and expand tax credits for raising and adopting children. It also would repeal an Affordable Care Act mandate that all Americans buy health insurance, which has long been a target of congressional Republicans.

U.S. Rep. Mike Bishop, R-Rochester, said manufacturers and farmers in Michigan would benefit from the tax bill, as would individual families.

“Michigan is the kind of state that will benefit the most from this tax reform bill,” Bishop said. “On the business side, in manufacturing, Michican can really use some help on that. I like what it does for small businesses and family farmers.

“I’m convinced folks who are going to be helped the most are the folks who are hurting the most. Everybody says ‘What will $1,000 do for somebody?’ It will do a lot.”

By contrast, Michigan Democrats attacked the tax measure during a Friday town hall held in Madison Heights. They argued the proposed changes eventually would include a tax hike for millions in the middle class, tax breaks for the wealthy and an increase in the country’s debt.

“This tax plan is a monstrosity, and the more we look at it, the more monstrous it is,” said U.S. Rep. Sander Levin, D-Royal Oak.

Wavering senators signaled Friday that they will support the tax measure, clearing the way for votes next week.

President Donald Trump has pushed Congress to send him a tax relief bill before the end of the year — calling it the biggest tax cut in American history. Democrats have called for Republicans to postpone a final vote on the measure until Sen.-elect Doug Jones, D-Ala., is seated after his victory in usually Republican Alabama.

The fight is likely to shape arguments in next year’s midterm elections as the parties vie for control of both chambers.

Bishop said passing the tax bill will give Republicans a big achievement to run on in 2018, despite polls showing the measure is unpopular with most voters at the moment. He predicted the measure would become more popular when voters see the savings they would achieve with lower tax rates.

“It’s a significant accomplishment for Congress to deliver this kind of relief after 31 years of allowing this catastrophe to metastasize,” he said, referring the last tax reform effort in 1986. “In the coming year, when the average American starts seeing double digit increasing in their health, they’re going to need some buffer and some relief of their own.”

But U.S. Rep. Debbie Dingell, D-Dearborn, argued that the legislation, set up for a Tuesday vote in the House, “is going to hurt working men and women.

“We know that it is going to not allow students to deduct their student loan interests, that it’s going to hurt seniors, children and contribute more than $1.5 trillion from the deficit,” she said at the town hall event. “And when that happens they are going to attack Medicaid,” the government health program targeted at low-income earners.

U.S. Rep. Rep. Tim Walberg, R-Tipton, disputed the allegation, arguing that most benefits would be felt by people who make between $40,000 and $80,000 a year.

“When people see less withholdings in their 2018 pay stubs, that’s going to be very good for them,” Walberg said.

U.S. Rep. Bill Huizenga, R-Zeeland, touted the proposed reduction in the corporate tax rate from 35 percent to 21 percent in the compromise tax bill.

“For us to remain competitive internationally, we had to get the corporate tax rate down,” he said. “Even President Obama wanted to get that down to 25 percent.”

Huizenga also touted an expansion of the child income tax credit from $1,000 to $2,000.

“That’s real dollars that are going to go into hard working folks bank accounts,” he said.

Michael Barr, a professor at the University of Michigan Law School, said his analysis finds 13 million people would pay higher taxes in 2019 and would increase to over 30 million by 2027. Estimates say it would add more than $1 trillion to the nation’s debt in the next decade.

“The tax cuts to do not pay for themselves,” Barr said.

Democrats focused Friday on criticizing the proposed repeal of the health care mandate, considered a key provision in former President Barack Obama’s health law that was passed in 2010. The mandate is considered critical to getting all Americans to buy health insurance and help pay for those who can’t afford it.

“Where would we be in auto insurance if everyone didn’t have to have it?” said Levin, who insisted it was time for universal health care coverage.

House Speaker Paul Ryan, R-Wisconsin, has indicated he would like to pursue entitlement reform in 2018 after passing tax reform. Democrats said changing those programs would hurt seniors and the poor.

“They are coming after our Social Security, our Medicare and Medicaid because there’s only one pot of money,” said U.S. Rep. Brenda Lawrence, D-Southfield. “They do not believe in what we call the safety net, they believe they are entitlements.”

Reducing the middle class was E’Toil Libbette of Southfield said her biggest concern is on how she thinks the legislation would reduce the middle class.

“There’s so much talk about this being a tax break,” Libbette said, “but it’s really a chance for them to chomp on Obamacare.”