WASHINGTON: Congressional Democrats say they’ll try to thwart Republican plans to overhaul the U.S. tax code by portraying them as a boon for the rich that betrays President-elect Donald Trump’s campaign promise to fight for working Americans.
“There’s going to be opposition if these tax cuts are directed to the people at the top again,” said Rep. Richard Neal, D-Mass., who represents his party’s first line of defense as the ranking Democrat on the House’s tax-writing Ways and Means Committee. “We’re going to be pretty united.”
Neal and others say they’ll zero in on upper-income tax breaks pitched by Trump and Republican House leaders in an attempt to make it politically difficult for them to support large parts of the emerging plans. Their initial comments suggest that the 115th Congress, which convenes Jan. 3 with a Republican-led agenda of instituting a broad tax overhaul and repealing the Affordable Care Act, will be peppered with debate over income inequality.
Trump and House Speaker Paul Ryan of Wisconsin have endorsed across-the-board cuts in individual income tax rates. After Republicans took the White House and kept majorities in Congress in November’s elections, both say they aim to achieve the most far-reaching overhaul of the U.S. tax system in a generation. Details remain to be filled in; for example, Ryan and others envision significant changes for corporate taxation that Trump’s economic team has yet to embrace.
Trump has sought to portray his plan as a pro-growth simplification of the tax code that would benefit the middle class. In a “Contract with the American Voter” published before the election, his campaign said of his proposal: “The largest tax reductions are for the middle class.”
Democrats plan to challenge this claim. “His populist image and the reality of his policies are on a collision course,” said Rep. Keith Ellison of Minnesota, a candidate for Democratic National Committee chairman. “And they’re going to crash.”
Consider two major provisions on which Trump’s and Ryan’s plans agree: First, they’d compress the existing seven individual tax brackets to three, cutting rates generally across the board. Yet the largest cut would be in the top rate, to 33 percent from 39.6 percent. That rate applies only to those with incomes well within the top 1 percent. Second, their plans would abolish the estate tax, which applies only to estates worth more than $5.45 million for individuals and $10.9 million for couples. Data from the Internal Revenue Service and the U.S. Census Bureau show that far less than 1 percent of the people who die each year pay any estate tax.
Democratic leaders haven’t proposed a tax plan to counter the House Republican proposal. Neal said Democrats intend to introduce alternatives soon but didn’t provide details, saying only that any tax breaks should be targeted at the middle class.
The party will draw lessons from earlier fights when it was able to block changes despite lacking control of the White House and Congress, said Drew Hammill, deputy chief of staff for House Minority Leader Nancy Pelosi of California. He cited the example of Democrats defeating Republican efforts to privatize Social Security in 2005.