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What you need to know about the GOP tax overhaul plan as Pence touts it in Plainfield

 November 9, 2017 | IndyStar | Link to Article

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WASHINGTON — Vice President Pence will pitch the GOP tax overhaul plan in Plainfield Thursday as the debate continues over what should be in a final package.

More details have been added since President Trump traveled to Indiana in September to announce an outline of the plan he hopes lawmakers will send him by the end of the year.

There are still many hurdles, however, to achieving that goal. And even some groups eagerly hoping for a bill are pushing for changes.

Here's a look at the state of play:

Where do things stand?

House Republicans are still tinkering in committee with the bill they introduced last week. They hope to bring it to a floor vote before Thanksgiving.

Senate Republicans could release their version of the plan as early as Thursday.

What’s in the House bill?

The major components of the bill are reductions in business taxes, including cutting the corporate tax rate from 35 percent to 20 percent. The bill would also simplify the individual tax code, lowering some rates while also removing many exemptions and deductions and capping others.

Most of the bill's $1.5 trillion cost would benefit corporations and business owners. Republicans argue the tax cuts are needed to spur economic growth, which will make up for the loss of revenue to the federal government. But independent analysts disagree. The credit ratings agency Fitch concluded the cuts could lead to a short-lived boost to output, but they won't pay for themselves or lead to a permanently higher growth rate. 

 

NEW ANALYSIS: Regardless of the economic model used, the House  bill will add to the national debt while only modestly improving economic growth. http://www.crfb.org/blogs/under-dynamic-scoring-house-tax-bill-still-explodes-debt 

Under Dynamic Scoring, House Tax Bill Still Explodes the Debt

Recent dynamic estimates of the Tax Cuts and Jobs Act (TCJA) show that, regardless of the economic model used, the House tax reform bill will add to the national debt while only modestly improving...

crfb.org
 

Would individuals get a tax break?

Most households would get a tax cut of more than $100 in 2019, according to the nonpartisan Joint Committee on Taxation. By 2027, the share of households getting at least a $100 benefit would drop to about one-third. And 20 percent would pay at least $100 more in federal income tax than under current law.

President Donald Trump speaks about tax reform at theBuy Photo

President Donald Trump speaks about tax reform at the State Fairgrounds in Indianapolis on Sept. 27, 2017. The invitation-only event was held at the fairgrounds' Farm Bureau Building. (Photo: Jenna Watson/IndyStar)

 

Would the bill stop Indiana from subsidizing other states?

Trump argued in a Fox News interview last month that states like California and New York “really are being subsidized by states like Indiana and Iowa.” Trump was talking about the existing tax deductions for state and local property taxes, and for state income or sales taxes. Taxpayers in states with a high cost of living benefit more from those deductions than taxpayers in lower-cost states like Indiana. (Only 23 percent of Indiana’s filers took the deduction for state and local taxes in 2015 compared with more than one-third of California’s and New York’s filers.)

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What do Indiana’s House members think of the plan?

Most of Indiana’s seven GOP House members put out statements praising the House bill when it was released. The exception was Rep. Trey Hollingsworth, R-Jeffersonville. Asked Wednesday if he supports the bill, Hollingsworth said in a statement he is “studying diligently to ensure we get the tax reform Hoosiers demanded last November.” (His spokesman said Hollingsworth doesn’t comment on draft legislation.)

On the Democratic side, Rep. Andre Carson, D-Indianapolis, has said the GOP plan will not grow the economy or help working families.

 
 

Hoosiers want  that is simpler, fairer & allows them to keep more of their hard-earned money. http://goo.gl/3iMgmQ 

 

What about Indiana’s senators?

GOP Sen. Todd Young called the House plan a “first step that will continue to be debated over the coming weeks.”

Democratic Sen. Joe Donnelly, who is being wooed by the White House, has said he wants a bill that will help middle class families and encourage businesses to keep jobs in the U.S. Donnelly is among the moderate Democrats who has met with President Trump and other White House officials about the tax bill. He also attended Trump’s tax speech in Indiana in September, at which Trump threatened to campaign against him next year if he doesn’t back the tax bill.

A pro-Trump group announced Wednesday it's paying for television ads in Indiana urging Donnelly to "do what's right for Indiana and pass tax reform today."

 

Joe discussed his tax reform priorities in a meeting yesterday with WH officials. Joe also urged VP Pence to ensure tax policies support American workers in advance of VP's Thursday trip to Indiana. Read Joe's letter to VP: http://bit.ly/2jadJHW 

 

Where do Indiana businesses stand?

The Indiana Chamber of Commerce, which is eager for a tax overhaul, likes much about the House bill including the cut in the corporate tax rate.

And if a bill doesn’t pass now when Republicans — who control the White House and both chambers of Congress are making an all-out effort — that raises the question of “under what circumstances are they ever going to get it done?” said Bill Waltz, the chamber’s vice president of tax and public finance.

“There’s a good message in passing something and there’s a really bad message in not passing something,” Waltz said.

 

But the National Federal of Independent Businesses opposes the House bill in its current form, and is pushing to expand the benefits for small businesses.

“This leaves far too many small businesses behind,” said Barbara Quandt Underwood, Indiana state director for NFIB, who will be at Thursday’s event. “If there’s going to be tax reform — and we’ve been waiting for tax reform for a long time — then let’s start with those that are the engine of the economy.”

The Indiana Manufacturers Association also has concerns. The group is enthusiastic about the cut in the corporate tax rate, the simplification of the tax code and moving toward making foreign income earned by U.S. companies tax-free.

But IMA has big concerns about a proposed excise tax on imports by multinational companies.

Andrew Berger, the group's vice president of governmental affairs, said the excise tax is particularly problematic for Indiana because of the amount of foreign investment in the state, such as the Japanese auto assembly plants. If the excise tax passes, Berger said, “the companies that are here would have second thoughts about their investments.”

“It’s that serious,” he said.

What do conservative groups think?

Getting a tax bill to the president’s desk is the top priority for Americans for Prosperity, a grassroots arm of the political network affiliated with billionaire industrialists Charles and David Koch that is particularly active in Indiana. Although the group is pushing for changes in the bill — including getting rid of the proposed excise tax on imports by multinational companies — state director Justin Stevens called the House bill a “great start on bold tax reform.”

“Our activists will continue to urge our federal delegation — particularly Sen. Donnelly — to rally behind tax reform and get it to the president’s desk by year’s end,” Stevens said.

But the Club for Growth, a group that challenges GOP lawmakers it considers not conservative enough, says the House bill “fails the pro-growth test.” David McIntosh, the former Indiana lawmaker who heads the group, has outlined four changes the Club is seeking to further reduce taxes on the wealthy.

“This bill must be changed if Republicans intend to keep their promise of real pro-growth, job-creating tax cuts,” said McIntosh, who is close to Pence.

 
 

4 issues in House GOP Tax Bill that must be fixed >>>

 

What do other interest groups think?

Interest groups are marshaling forces to protect some of the tax benefits for individuals the House bill would limit or eliminate.. For example, AARP and the American Cancer Society Cancer Action Network are among the groups fighting the proposed elimination of the existing tax deduction for large medical expenses. Home builders and Realtors are trying to protect the mortgage interest deduction. Social conservatives are rallying to keep an adoption tax credit.

And the Indianapolis Congregation Action Network, a faith-based group active on social and economic justice issues, is opposing the entire bill. The group argues it will give tax breaks to the rich while leading to a reduction in health care and other services for those in need.

Contact Maureen Groppe at mgroppe@gannett.com. Follow her on Twitter: @mgroppe.

Pence visit

Vice President Mike Pence is scheduled to visit Plainfield Thursday to tout the GOP tax overhaul plan.

When: 5:15 p.m.

Where: TKO Graphix, Plainfield

What: Pence is scheduled to participate in a roundtable discussion on tax reform with area families and business representatives. He is scheduled to address those in attendance at 5:45 pm.