CHARLESTON, W.Va. — For Jason Huffman, state director of the West Virginia chapter of Americans for Prosperity, the congressional efforts to pass tax legislation is an opportunity to spur economic growth.
“This is a huge step for taxpayers. This is going to make American businesses competitive again, it’s going to put more money in the pockets of West Virginians and we’ve championed this issue since day one,” he said.
Yet from the viewpoint of Ted Boettner, who serves as the executive director of the West Virginia Center on Budget and Policy, lawmakers are serving the wealthiest Americans and corporations by pushing legislation that protects tax cuts for high-income earners.
“This is just a horrible waste of resources,” he described the Senate’s version of the Tax Cuts and Jobs Act.
Those are the arguments as legislators begin the conference committee process on passing a tax overhaul bill. Party leaders from the Senate and the House of Representatives appointed conferees last week to draft a joint tax bill, with the goal among Republicans to pass something before the end of the year. President Donald Trump previously said he wants to sign legislation by Christmas.
Both chambers’ passed plans cut the corporate tax rate to 20 percent — although the Senate version delays the move until 2019 — as well as changes for “pass-through” businesses. The House bill would consolidate the seven individual tax brackets to four, while the Senate bill would modify the tax rates. Both versions of the Tax Cuts and Jobs Act would nearly double the standard deduction for individuals and couples.
The individual mandate of former President Barack Obama’s health care law would be repealed as part of the Senate plan, a move the Joint Commission on Taxation reports would result in 13 million Americans being uninsured in 2027 and premiums increasing by an average of 10 percent.
Huffman said based on the passed legislation, supportful lawmakers are aimed at creating a competitive business environment as well as putting more money in the pockets of individuals. He added changes business taxes will “definitely help West Virginia businesses, especially small businesses.”
“At the end of the day, changing the tax code the way that the Senate bill especially presents is a historic change, a once-in-a-generation change,” he said.
The JCT reported an earlier version of the Senate tax bill would increase deficits by $1 trillion between 2018 and 2027, noting the number accounts for around $408 billion in economic growth. The Congressional Budget Office said a $1.5 trillion addition to the deficit could trigger a $25 billion cut to Medicare.
Huffman discounted these reports, saying the JCT previously underscored the economic growth that took place as a result of tax legislation under former President George W. Bush.
“They discounted a lot of positive growth effects of tax reform package,” Huffman said of the recent analysis. “That’s one government analysis, granted what some folks would call ‘mainstream.’ History proves that tax reform — tax cuts specifically — they grow the federal revenue. Why? Businesses make more money and people have larger paychecks and they are putting more into the economy.”
Boettner said a congressional bill would hurt most West Virginians, noting how the individual tax cuts in the Senate plan would expire in 2026 while the corporate tax change would remain.
“People say, ‘Oh, you’re going to get tax cuts up front, but you’re going to get tax increases at the end. Don’t just look at the end,'” he said. “That’s part of the bill. That was their choice to make a lot of middle-income West Virginians pay for tax cuts for the wealthy.”
Leading up to the Senate’s vote on Dec. 2, the West Virginia Center on Budget and Policy shared reports from multiple groups on its Facebook page regarding the measure’s impact; the Center on Budget and Policy Priorities pointed out how low- and middle-income Americans would be negatively impacted by this expiration, as well as the repeal of the individual mandate. According to the Center on Budget and Policy Priorities, Americans making less than $75,000 would see an average increase between $20 and $360 in 2027.
The Institute on Taxation and Economic Policy said in a November report 60 percent of West Virginians would see a tax increase.
“We’re looking at a debt of at least $1 trillion over 10 years, and there’s a lot better ways we could invest that money back into our communities and have good-paying jobs,” Boettner said.
“For the amount they spent on this tax cut, we could be expanding college eligibility in West Virginia, we could be building out our broadband infrastructure, we would have a lot of great things we could do with it. That’s not what’s happening.”
Republican Reps. David McKinley, Alex Mooney and Evan Jenkins voted on Nov. 16 in favor of the House tax bill, and Sen. Shelley Moore Capito, R-W.Va., voted for the Senate tax plan on in the early morning hours of Dec. 2. Sen. Joe Manchin, D-W.Va., voted against the nearly 500-page bill, in which pages were crossed out in pen and sections modified with notes written the margin.
“That’s not the way good policy is made, and it’s a real slap in the face to our democratic system to do that,” Boettner said of the Senate bill. “I think they need to take their time and West Virginia needs to know what’s exactly in that bill because, frankly, I don’t even though what’s in that bill. You don’t know what’s in the bill. A lot of people don’t because it was rushed so quickly.”
Capito said on Dec. 4’s MetroNews “Talkline” she had the opportunity to read the bill before the early vote.
“It’s been out in the public space. It’s been in front of the (Senate) Finance Committee, the Budget Committee, the Energy Committee,” she said, adding the position that no one had time to read it was a “disingenuous argument.”
Manchin, appearing on the Dec. 5 edition of “Talkline,” said the bill was hurried through with little understanding of possible consequences. He adding he had heard from leaders in the coal industry about how the Senate plan would maintain the alternative minimum tax and eliminate the net interest deduction, costing the coal industry millions of dollars.
“There’s not been one hearing. Not one hearing to date,” Manchin said. “When they say that, I will say that is very disingenuous and wrong.”
Huffman placed the blame on special interests for stories regarding how the bill was passed. He then said this was legislation Manchin should have supported.
“This is the exact tax reform that he has championed,” Huffman said. “For him to go back on his word when there is a president who is willing to sign a bill and a Congress that is willing to get it across the line, I think it is not only disingenuous, but it shows he was standing with special interests instead of struggling West Virginians.”
American for Prosperity-West Virginia called Manchin out after the vote in a press release, with Huffman saying Manchin is hiding behind misinformation to protect “a broken status quo.”
Manchin responded to the organization in a statement through his senatorial campaign, saying it is possible to get bipartisan tax legislation passed, as Congress did in 1986 under then-President Ronald Reagan.
“It’s a shame (Senate Majority Leader) Mitch McConnell didn’t want to follow Ronald Reagan’s example and pass a bipartisan bill. Instead, he rammed through a 500-page bill that no senator had a chance to read,” he added.
Boettner said he did not want to provide political analysis on the Senate vote, and rather hoped clear and beneficial legislation would be put forward by the conference committee.
“I would like to see us do bottom-up tax cuts, expand the child tax credit much better than they have, expand the earned income tax credit, give low-income working families a huge tax cut instead of just giving tax cuts to the wealthy who won’t spend it in our local economy,” he said.
The Congressional Conference Committee is scheduled to host an open meeting on the Tax Cuts and Jobs Act on Wednesday.