President Donald Trump visits Missouri Wednesday, where he’s expected to urge the U.S. Senate to pass a tax plan. He’s scheduled to speak at 2:30 at the St. Charles Convention Center.
The Republican President and elected GOP members in Congress have been driving home the claim that the plan passed by the House and the proposal being fine tuned in the Senate will help middle class workers.
A major stumbling block are recent analyses issued by non-partisan Congressional groups the Joint Committee on Taxation (JCT) and the Congressional Budget Office (CBO).
Both studies show that with the Senate proposal, middle income workers will get immediate tax relief, but will end up paying more out of their pockets to Uncle Sam in the next several years.
The reason for the reversal is the Senate plan’s repeal of the Affordable Care Act’s requirement for people to buy insurance or face a penalty. The analyses calculate that health care costs will rise as people drop coverage.
Those that drop insurance because of the cost will also lose their tax credits and subsidies that come with coverage. Those losses are figured into the tax analyses by the CBO and JCT.
Under that scenario, people making $30,000 start to pay more in taxes in 2021. People earning $40,000 or less pay more in 2023, and those making $75,000 pay more by 2027. Higher income earners continue to see income tax cuts throughout that stretch.
The implications are even greater under the CBO scoring which calculates the effect of the Senate plan on Medicaid and Medicare.
If the repeal of the Affordable Care Act is done away with, most income groups will pay less until 2027, when the individual tax cuts are set to expire.
But for Senate Republicans to pass a tax plan with only 51 votes, the package can’t raise the deficit by more than $1.5 trillion over 10 years. The GOP may need the savings generated by the repeal to meet that requirement, at least as calculated by the CBO and JCT. Much of the details of the congressional groups’ analyses and are included in release from the JCT and CBO.
Missouri’s 4th District Republican Congresswoman Vicky Hartzler claims the JCT scoring of the House tax plan brings substantial growth and doesn’t have a severe impact on the deficit. She says the majority of people who live paycheck to paycheck deserve to keep more of what they make.
“It’s time to give them some relief,” said Hartzler. “It’ll also jump start our economy, so that businesses will be able hire more workers and give much needed pay raises to their employees.”
The Koch Brothers funded Americans for Prosperity (AFP) is a conservative/libertarian leaning group that is a proponent of both Republican plans in Congress. AFP Missouri’s Jeremy Cady points to a Boston University study which projects the corporate tax cut included in both proposals will bring strong growth and savings for average tax payers.
“Reducing the corporate tax rate to around 20% would actually raise the GDP between 3% and 5%,” said Cady. “(It) would also raise real wages between 4% and 7%, which I think translates roughly to $3,500 or more per working American.”
The House and Senate tax plans reduce corporate rates from 35% to 20% and leave them in place permanently, while both sunset individual tax cuts after 10 years.
Tracy Gleason with the left leaning Missouri Budget Project contends any tax cuts experienced by working people would negated by cuts to services caused by a massive deficit increase.
“The deficits would ultimately have to be paid for,” Gleason said. “And if those Congressional budget plans are any sign, they’d be paid for through cuts to services like Medicare, nutritional assistance, college aid. Those are things that would leave working families even worse off.”
Senate Republicans hope to adjust their proposal in order to bring several holdouts in the party on board and pass a plan this week. It’s hoped that the House and Senate could iron out differences and present a finished product to President Trump by Christmas.
Meanwhile, Wednesday marks the President’s second trip to Missouri since August to promote a Republican tax overhaul. Congresswoman Hartzler thinks he’s returning to the Show-Me State partly to press Democratic Senator Claire McCaskill into supporting the plan.
“I’m hopeful that Senator McCaskill will support the tax relief in this bill, and I’m sure the President wants to encourage her to join forces as well on this initiative.”
McCaskill’s office says she hasn’t been invited to Trump’s appearance at the St. Charles Convention Center. The Missouri Democrat called the Senate proposal a “bad deal for Missouri families” when she voted against it earlier this month as a member of the Finance Committee.
“Working people in Missouri deserve better than to get scraps, while corporations and wealthy business owners make out like bandits in a plan that explodes our deficit and compromises our military,” said McCaskill shortly after the vote.
McCaskill faces a tough reelection next year in an increasingly Republican state that Trump won by 19 points in last year’s Presidential vote.