President Trump’s address at the St. Charles Convention Center Wednesday marked his second speech in Missouri focused on taxes in roughly two months.
Since his first visit in late August to Springfield, the playing field for tax legislation in Congress has changed. The House passed its plan on party lines, while Republican leaders in the Senate have vowed to bring their version to the chamber’s floor for a vote this week.
Missouri’s entire GOP House delegation from Washington rode on Air Force One with the President to the Show-Me state for his speech.
Unlike Republican Senator Roy Blunt, who’s stayed at the Capitol to work on the Senate proposal, House members reached out to promote the legislation at every opportunity following the President’s address. And their Democratic counterparts from Missouri have been equally vocal in their opposition to the measures.
3rd District Republican Congressman Blaine Luetkemeyer says the plan passed by the House offers major tax cuts to two important groups – small businesses, and those making $200,000 or less.
“To Me, those are the two things that are important,” said Luetkemeyer. “(It’s) to drive the tax cuts to the middle class so we can get our economy going, as well as the small business people that really provide most of the jobs and drive our economy as well.”
The small business tax cuts are phased in by 2023 under the House plan. The top rate will be reduced from 39.5% to 25%, although most small businesses are already paying the lower figure.
Most small businesses are pass through’s, meaning the income passes through to the owner’s individual tax return. The House plan does have a feature offering a 9% tax rate on the first $75,000 of income of business owners who make $150,000 or less.
Part of the Democratic objection to the Congressional tax plans is the elimination of deductions for people they say need the extra money. 1st District Democratic Congressman William Lacy Clay made the argument to preserve certain deductions on the House floor Wednesday.
“I would like President Trump to show me why he wants to bury 255,000 Missouri students, who hold student loans, even deeper into debt by eliminating the deduction for student loan interest.”
Clay also said 165,000 Missouri taxpayers would no longer be able to deduct medical expenses under the Republican plan.
As nonpartisan Congressional groups such as the Joint Committee on Taxation (JCT) and the Congressional Budget Office (CBO) have reported the tax plans widen the deficit by $1.5 trillion over 10 years, Republicans have relied instead on scoring by the U.S. Chamber of Commerce to make their case.
The Chamber has endorsed tax reform and has said it will judge any package on whether it improves economic growth. By the Chamber’s calculations, the House blueprint will create 975,000 jobs.
Congressman Luetkemeyer is unfazed by the JCT and CBO deficit projections, and believes the tax cuts will unleash strong growth. “You allow the people to keep their money. You allow the businesses to keep their money, and invest it as they see fit, and let them push this economy forward, and it will happen.”
Democrats says the GOP tax plans favor the wealthy. Missouri 5th District Congressman Emanuel Cleaver thinks the elimination of the estate tax is an egregious giveaway to high income earners.
“We’re a state of over 5 million people,” said Cleaver. “There are 90 families, 90 families, out of 5 million plus that are involved with the estate tax. What it means is these couples can leave their children $10 million untaxed.”
The House and Senate GOP tax plans have one striking difference.
The House passed a pure tax measure, while the Senate included a provision to scrap the Obamacare mandate that most people buy health insurance or pay a penalty.
Although she’s not a member of the upper chamber, 4th District Republican Congresswoman Vicky Hartzler sees consistency in dropping the mandate.
“I’m very supportive of doing that,” said Hartzler. “The Supreme Court ruled that that mandate is actually a tax. And so, it does come under the purview of this bill.” So far, House leadership hasn’t indicated it wants to include a repeal of the mandate in its package.
Missouri’s Democratic Senator Claire McCaskill joined several party colleagues to address the press in the buildup prior to President Trump’s Missouri speech. She reiterated her displeasure that Republicans in her chamber seemed to be angling toward passing a tax plan on party lines.
“The Republicans are squandering an attempt to get permanent tax reform,” said McCaskill. “The way you get permanent tax reform is by getting more that 50 votes. And they way you do that is working in a bipartisan way. What we show here today is that that is possible. It is not only possible, it is probable that that would occur if they would just work with us.”
McCaskill cast a no vote in committee on the Republican tax plan, saying it would give the vast majority of benefits to millionaires and billionaires, while working families would get hurt.