Re-elect Dan Lipinski Congressman

Bumpy Start for Trump's Big Tax Plan

04/27/2017

Crain's Chicago Business

President Donald Trump may have met his own standards in outlining plans for what his administration termed "big and important" tax cuts, but given the reactions of Illinois members of Congress, passage will require one heck of a sales job.

Democrats' responses ranged from cool to outright hostile.

"I'm concerned about the proposal's increasing effect on our debt and lack of focus on helping working and middle-class families," said Rep. Brad Schneider of Deerfield, in one of the more tempered reactions.

More typical was a statement from Rep. Robin Kelly of Matteson, who said Trump's plan "should be dead on arrival in Congress. It gives billions away to the super rich while placing the burden on the backs of working families."

Republicans ducked or, in a somewhat more restrained way, were critical too.

"I want it to be paid for," declared Rep. Peter Roskam of Wheaton, suggesting in so many words in a series of TV interviews that the plan falls well short of doing that.

Republicans have declared the national debt to be a national security matter, Roskam noted. "And now we're just going to walk away from it? I don't think that's the smartest plan."

"The plan" is much heavier on proposing to cut rates and whole levies than on finding replacement revenues. That's key because, if Trump wants to avoid a Democratic filibuster in the Senate, any tax cut that is not replaced with at least equal alternate revenues can last for only 10 years.

The current seven individual tax brackets would be cut to three, with a maximum 35 percent. The corporate rate would be slashed from 35 percent to 15 percent—the latter rate would apply to "pass though" entities such as partnerships—and without the "border adjustment" feature that House Speaker Paul Ryan has wanted.

Trump also would abolish both the alternative minimum tax and the estate tax, generally helping higher-income individuals, but also would almost double the standard deduction—for instance, moving to $26,000 for married couples.

One of the few replacement revenue raisers in the outline is a proposal to abolish the federal deduction for state and local taxes. But that's a huge impediment for lawmakers in relatively high-tax states such as Illinois, whose constituents would lose a big money saver. As Kelly put it, "The IRS shouldn't be in the business of double-dipping into the hard-earned paychecks of working families."

North Side Democrat Mike Quigley said the plan "will add trillions to the debt without providing substantial relief for working families. This plan represents another broken promise to the American people during (Trump's) first 100 days in office."

Southwest Side Democrat Dan Lipinski said the plan "will not fly. It appears to greatly increase our debt. It's a wish list."

Two other Democrats made similar points.

"Our country cannot afford a repeat of the enormous deficits that happened the last time Republicans controlled all three branches of government, when the (George W.) Bush tax cuts and runaway military spending took the $200 billion surplus inherited from the Clinton administration and turned it into a $1.5 trillion deficit," said Naperville's Bill Foster. Sniffed Chicago's Luis Gutierrez, "I'm for simplification, but not fundamentally tilting the playing field to help rich fat cats."

Among Republicans, Plano Rep. Randy Hultgren had nothing to say, at least for now.

Joliet's Adam Kinzinger did release a statement, but said only that he "has been looking forward to working with the White House on tax reform" and that he "is hopeful we can simplify the tax code."

Roskam, who is a key figure as chairman of the tax policy subcommittee of the House Ways & Means Committee, was careful with his words but also clear that the Trump plan needs work. At one point, he went so far as to liken potential shortfalls in Trump's proposal to the fiscal situation in Illinois, "an example of how not to handle deficits."

Roskam said he still favors the border adjustment tax that Ryan has championed, in part because it would close the funding gap and make it more likely Republicans can pass a plan with permanent and not just temporary tax cuts.

"The question is whether we want permanent tax policy or not," he said. "That's the new fault line that's developing."

Roskam also indicated that, unlike with health care, Congress should take its time on this one—likely a good idea, given the political ramifications. "We ought to make sure we thoroughly debate on this and not take the easy way."

Illinois' two senators, Democrats Dick Durbin and Tammy Duckworth, were highly critical.

"President Trump should release his own tax returns if he wants to have any credibility in a debate about America's tax code," Durbin said. "His 'plan' would add dramatically to the national debt to fund a massive tax giveaway to corporations and millionaires."

Duckworth went even further: "The president's plan would enrich his family and his ultra-wealthy friends while leaving taxpayers with the bill. Without his tax returns, we can't know just how much the president stands to gain under this harmful proposal, but we do know that the Trump organization would benefit to the tune of tens of millions of dollars."


Donate Now

Get Involved

Lawn Sign Volunteer Contribute Get Updates