The U.S. Senate last night passed the Tax Cuts and Jobs Act — a sweeping revision of U.S. Tax code, that depending on who is talking is either a spark for job and wage growth or a massive, deficit busting giveaway to the rich, political donors and corporate America.
The House voted Tuesday to approve the package, but will have to revote Wednesday because of three provisions in the original bill that would not pass muster for a Senate reconciliation vote. President Donald Trump is expected to sign the bill this week, with the new tax rules taking effect on Jan. 1, 2018.
The Chester County Congressman who all voted for the package — U.S. Rep. Ryan Costello (R-6), U.S. Rep. Patrick Meehan (R-7) and U.S. Rep. Lloyd Smucker (R-16) — said they see it as a job and economy booster in comments immediately after initial passage of the legislation.
“Every American deserves the opportunity to pursue his or her own version of the American Dream, Smucker said in a statement. “Today, our complex and outdated federal tax code leaves families feeling like they’re doing everything right, but still struggling to make ends meet. The status quo on taxes is failing the middle class.
“Throughout this past year, I have been hearing from constituents about what tax reform should do for them and their families. They want a simpler, more honest federal tax code that lets them keep more of their paycheck and restores American competitiveness – and that’s what this bill does.
“I have also had conversations with constituents about specific provisions in our tax bill that have been good for our community. Our older population has been able to reduce its tax liability because of the deduction for medical expenses. Cities like Lancaster, Reading, and Coatesville have taken advantage of the New Market and Historic Tax Credits to jumpstart economic activity and put people back to work. I fought to retain these important provisions to help ensure this tax plan works for our district.”
One of Smucker’s would-be Democratic opponents — Christina Hartman — said she saw the bill in a different light.
“With overwhelming evidence and independent analyses showing that this tax bill will leave America’s middle class out in the cold, the GOP and Rep. Lloyd Smucker have redoubled their efforts to enrich the top 1% and huge corporations,” Hartman said in a statement. “Here in the 16th District, middle-class families will get tax hikes so that Rep. Smucker can shower his donors with massive tax cuts.
“This misguided adventure would be amusing if it didn’t impact the life and livelihood of nearly every American. From the beginning, Democrats have called for transparent, thoughtful legislation that simplifies the tax code, doesn’t further increase the national debt, and gives tax cuts to those who need it most—the middle class and small businesses, not corporations and the 1%.
“Unfortunately, Republicans in Washington have other priorities, and putting money back into the pockets of hard-working Pennsylvanians isn’t one of them. As we move closer to the GOP endgame, it’s clear that Rep. Smucker isn’t concerned with this tax cut scheme’s long-term negative consequences for Pennsylvania.
“Rep. Smucker, I’ve said it before and I’ll say it again – your vote for this travesty is unacceptable. The people of PA-16 deserve better, and those who sent you to Washington know that the blame will rest squarely on your shoulders.”
Meehan, though, strongly defended the bill.
“This bill brings needed tax relief to middle-class families,” said Meehan. “It doubles the standard deduction, meaning the first $24,000 a married couple earns will be tax free. It lowers rates overall and it doubles the size of the child tax credit. The end result will be a lower tax bill for the vast majority of middle-class taxpayers.”
“Importantly, the compromise reached between the House and Senate preserves deductions for state and local property or income taxes, mortgage interest, and charitable contributions. I’m particularly pleased that this bill preserves and makes more generous the deduction for medical expenses – so important to many Pennsylvania seniors with expensive medical bills. It also repeals Obamacare’s harmful ‘individual mandate’ tax, which disproportionally hits working families. In Pennsylvania, 83% of taxpayers hit by the individual mandate penalty earned less than $50,000 a year.”
“This legislation doesn’t just mean more money in the pockets of middle class families. It means more jobs, too. It’s the most significant revamp of our broken business tax code in decades, and it will bring thousands of jobs back to our shores from overseas. It also gives small businesses a tax cut. One study, by the nonpartisan Tax Foundation, indicates the bill will generate more than 13,000 jobs in Pennsylvania.”
One of Meehan’s potential 2018 opponents, Drew McGinty, strongly disagreed with that argument.
“Patrick Meehan’s continued support for the tax bill is an early Christmas present for corporations and the wealthy at the expense of middle-class families in Pennsylvania and our children and grandchildren’s future,” McGinty said. “I support simplifying our tax system and decreasing the burden on families in the Commonwealth, but this scam accomplishes the opposite and is the perfect example of gross fiscal negligence. As the author of this bill, Patrick Meehan owns the repercussions of this bill and come November 2018, Patrick Meehan should be held accountable for his ‘YEA’ vote. When I defeat Patrick Meehan, I promise to work tirelessly on behalf of middle-class families for a fairer tax system.”
Costello argued that the bill had been unfairly characterized in the media and that working people will see the benefit of the plan.
“American workers are the lynchpin of a healthy economy,” he said in a statement. “Employers provide the capital and take the risk to create value in services and products. Families are the backbone of our society. For all of them, we need an economy that invests in people and rewards hard work. To start, and to be clear, this tax bill cuts taxes for low income Americans, and it does so by doubling the standard deduction. Middle income families will benefit from lower rates and doubling the child tax credit to name just a few policies. And for those itemizing on their tax return, up to $10,000 is still able to be deducted from property and income taxes, along with the mortgage interest deduction; when you combine this with lower income tax brackets and higher income thresholds, the overwhelming majority of my constituents will get a tax cut. This means hard earned money back in your wallet to be saved, invested, and spent at businesses in Southeastern Pennsylvania. I believe hardworking taxpayers deserve a tax cut and that is why I’m proud to support this tax relief bill.
“On the business side, small businesses will have more capital to invest – in their workers – through higher wages and with more job creation – and in their equipment and machinery, which will also have a positive economic impact. This bill will create jobs. And a tighter labor market means companies compete for workers and wages rise. We are losing jobs and investment to other countries. Today, the U.S. corporate tax rate remains at 35 percent while the worldwide average corporate tax rate is 22.5 percent. Did you know that the average rate among U.S. trading partners, the vast majority of which have converted to territorial tax systems, is 24.6 percent? This tax bill makes us competitive for future investment and growth in the global economy.
“There are so many myths that persist, and I would like to clear up a few of them. The teacher supplies deduction remains. The child tax credit has been expanded. The charitable deduction continues and expands. We have maintained the earned income tax credit. We have improved savings accounts for education. Tuition waivers for graduate students will remain untaxed. We have preserved the medical expense deduction and even expanded it for two years. We have lowered individual tax rates across the board to zero, ten, 12, 22, 24, 32, 35, and 37 percent respectively, which benefits all Americans. A typical family of four earning the median family income of $73,000 will receive a tax cut of $2,059. The average single mom in America makes around $41,000. Under this legislation, she will receive a tax cut of over $1,300.”
But Chrissy Houlahan, the Democrat who appears likely to take on Costello for his seat next year, both disagreed and said that a number of things that the Congressman said were inaccurate or disingenuous.
“Representative Ryan Costello and this dysfunctional Congress just passed a historic tax scam that is wrong for our nation and wrong for our constituents,” said Houlahan. “Costello’s vote will hike taxes on many middle-class families and add trillions to our deficit all to give tax breaks to the super wealthy who need it least.”
“I have helped grow businesses and non-profits here in Southeastern Pennsylvania, and I know we need a simplified tax code that eases the burden on the middle-class and small businesses. This bill was not the solution, and Costello needs to explain why he voted for this bill to help his donors and hurt his district.”
Houlahan disputed a number of items in Costello’s statement on the tax bill including the following bullet points as issued by her campaign:
1 . Costello said “this tax bill cuts taxes for low income Americans […] middle income families will benefit.”
Houlahan’s campaign replied: The non-partisan Joint Committee on Taxation estimates that by 2023, the average taxpayer at every income level under $30,000 sees a tax increase; by 2027, the average taxpayer at every income level under $75,000 sees a tax increase [Joint Committee on Taxation, 12/18/17]
Costello said “There are many myths that persist, and I would like to clear up a few of them. The teacher supplies deduction remains […] Tuition waivers for graduate students will remain untaxed. We have preserved the medical expense deduction and even expanded it for two years.”
Houlahan’s campaign replied: These are all provisions that Costello previously voted to
Costello said “I have listened to everyone”
Houlahan’s campaign replied: The Daily Local News reported Monday that Costello’s West Chester office is now closed to the public: “The door was locked and demonstrators were not allowed to enter Costello’s office, which recently was closed to the public, except by appointment only. Demonstrators were asked to sign a log at a table outside the office. Kori Walter, district director, told protesters that the door was locked because demonstrators had become a distraction and were a security risk.” [Daily Local News, 12/19/17]
A similar divide exists between the state’s two U.S. Senators, Pat Toomey (R) and Bob Casey Jr. (D).
Toomey expressed satisfaction after the Tuesday night Senate vote:
“Tonight the Senate passed the most historic reform to our tax code in over three decades,” Toomey said in a statement. “In doing so, we’ve achieved two major accomplishments for the American people.
“First, we lowered the tax burden on hardworking individuals and families. The vast majority of lower and middle-income taxpayers will pay less in federal taxes. Second, we fundamentally restructured the business tax code which will enable American workers and businesses to compete globally, encourage a surge in economic growth, and create better paying jobs. This bill fundamentally shows that we believe in the capacity of the American people to restore the vibrant economic growth that we used to take for granted.
“I thank Majority Leader McConnell, Speaker Ryan, Chairman Hatch, and Chairman Brady for their leadership throughout this process and my colleagues in the Senate for their hard work and perseverance. I am excited the President will soon sign this bill into law, making good on the promise we made to the American people.”
Casey, on the other hand, was not so charitable.
“This is an insult to the many middle class families in Pennsylvania who will pay more in taxes under this scheme while the super-rich and big corporations get a windfall,” Casey said. “Congress should be working in a bipartisan way to make our tax system simpler and fairer, but the Senate Republican plan does just the opposite. In 2019, the country’s 572,000 richest households will see $34 billion worth of tax cuts, while the 90 million Americans making under $50,000 a year will see a fraction of that. That is both obscene and grossly unfair.
“The bill rewards companies who outsourced jobs by giving them a big tax cut and may actually encourage more outsourcing in the future. What’s worse is that this tax plan will trigger $25 billion in automatic cuts to Medicare unless Congress acts. Now, after creating a huge hole in the deficit by giving tax cuts to the super-rich, top Republicans are saying they are planning to go after Social Security, Medicare and Medicaid. Adding insult to injury, the bill also includes a partial repeal of the Affordable Care Act, which will result in 13 million Americans losing their health care while premiums increase for families across Pennsylvania by an additional 10% per year. That’s wrong and I will fight against it.
“The Republican tax plan that just passed the Senate rewards companies who outsource jobs and ends tax deductions that help the middle class. I will continue to fight for real bipartisan tax reform that helps the middle class. What passed today is a big Republican giveaway to corporations and Republican corporate donors.”
