Toomey, Casey weigh in on passage of Senate tax bill
Pennsylvania’s two U.S. senators responded along party lines to the Senate’s narrow passage early Saturday morning of legislation overhauling much of the federal tax code.
The bill, which Congress’ nonpartisan Joint Committee on Taxation (JCT) said would worsen federal deficits by more than $1 trillion over a decade, passed the Senate by a 51-49 count, was uniformly opposed by all 48 Senate Democrats and one Republican, Bob Corker of Tennessee.
Sen. Pat Toomey, R-Pa., lauded the bill in a statement Friday, characterizing it as a “pro-growth” tax reform bill that brings hard-working Pennsylvanians “one step closer” to a direct pay raise and better job opportunities.
“Our bill directly lowers the tax burden for middle income families and fundamentally restructures the business tax code so American workers and businesses can compete globally,” Toomey said. “It transforms one of the world’s worst business tax codes into one of the most competitive, making it easier for entrepreneurs to start new businesses and giving employers greater incentives to buy new capital equipment and bring operations home from overseas. I am confident these reforms will unleash a surge in economic growth and job creation.”
Democrats won enough Republican support to kill a provision proposed by Toomey that would have given a tax break to conservative Hillsdale College in Michigan.
Sen. Bob Casey, D-Pa., excoriated the bill in a statement released Saturday morning.
“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.”
Casey argued that 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,” Casey said, alluding to a statement by the nonpartisan Congressional Budget Office (CBO) that the bill would do just that.
Casey fears that the tax bill could bolster Republican ambitions to cut entitlement spending.
“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,” Casey said. “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 percent per year. That’s wrong and I will fight against it.”
Casey also blasted the bill for ending tax deductions that he said help the middle class.
“I will continue to fight for real bipartisan tax reform that helps the middle class,” Casey said. “What passed today is a big Republican giveaway to corporations and Republican corporate donors.”
For individuals, the Senate bill repeals the deduction for medical expenses and repeals the deduction for state and local income or sales taxes not paid or accrued in a trade or business, increases the standard deduction and repeals the deduction for personal exemptions
For businesses, the bill reduces the corporate tax rate from a maximum of 35 percent to a flat 20 percent rate.
The bill eliminates deductions for state and local income taxes, moving expenses and other items. The standard deduction, used by most Americans, would nearly double to $12,000 for individuals and $24,000 for couples.
Individuals would be allowed to deduct up to $10,000 in property taxes.
The bill would abolish the Affordable Care Act, or “Obamacare,” requirement that most people buy health coverage or face tax penalties. That would weaken the law, industry experts have said, by easing pressure on healthier people to buy coverage, and the CBO has said the legislation would push premiums higher and leave 13 million additional people uninsured.
The Senate bill would repeal the tax cuts for individuals and families after 2025, and a subsequent return to existing rates would set up a sharp tax increase for millions of households, according to estimates by the CBO and the JCT.
Personal income taxes would increase $430 billion between 2025 and 2027, and the tax hikes would likely keep accelerating in subsequent years.
If all the expired tax cuts were preserved and spending stayed constant, the deficit would increase by $1.9 trillion over 10 years and continue to rise in the following decade, according to estimates by the nonpartisan Center for a Responsible Federal Budget.
Republican supporters of the bill have argued that economic growth stimulated by lower taxes would address federal shortfalls.
Republicans in the U.S. Senate and U.S. House of Representatives are now aiming to reconcile the Senate tax reform bill with a different but similar tax bill passed by GOP members of the House last month. Rep. Bill Shuster, R-Hollidaysburg, supported the House bill.
“I hope the House and Senate soon come together to finish our work on this bill, and deliver on our promise of a better and brighter economic future for all Americans,” Toomey said.
The Associated Press contributed to this report.