ST. GEORGE – Sen. Orrin Hatch continued to tout the benefits of Senate Republicans’ proposed tax reform legislation during a congressional panel Monday.
The proposed Tax Cuts and Jobs Act is heralded by the senator from Utah as a boon to middle class families that will relieve their tax burden and boost the nation’s economy.
“Under our bill, a family of four making the U.S. median family income of around $73,000 a year will see their federal income taxes reduced by more than 40 percent,” Hatch said. “In specific dollar terms, that’s a reduction of nearly $1,500 for a single year. That’s about $125 more take-home pay for every month.”
A single parent making $41,000 annually would get a cut of over $1,000, Hatch said, adding it is real money that will help improve the quality of life for tens of millions of American families as they are better able to make ends meet and save for the future.
Hatch also reiterated that the ultimate goal of his tax plan is the financial advancement of middle-class Americans.
“There are many in the middle class who have felt left behind in the sluggish economy under the previous administration, and they feel that they are not being heard,” he said. “We have an opportunity this week to show that we are listening, that we will act to get the economy moving again to provide better wages, more jobs and new opportunities for individuals and families in America.”
According to a report from the independent tax policy nonprofit group Tax Foundation released Friday, the Senate GOP’s tax reform bill would grow the economy by 3.7 percent, increase wages by 2.9 percent and create nearly 1 million new jobs.
The analysis also predicted the tax overhaul would provide more than $1.2 billion in new revenue for the federal government from “positive economic effect.”
In Utah specifically, the Tax Foundation’s study states Utah would gain over 9,100 new full-time jobs and lead to a $3,000 estimated gain in after-tax income for middle-income families.
Overall, the legislation would deeply cut corporate taxes, double the standard deduction used by most Americans and limit or repeal completely the federal deduction for state and local property, income and sales taxes. It carries high political stakes for President Donald Trump and Republican leaders in Congress, who view passage of tax cuts as critical to the GOP preserving its majorities at the polls next year.
With few votes to spare, Republican leaders hope to finalize a tax overhaul by Christmas and send the legislation to Trump for his signature.
However, according to a nonpartisan analysis of the Senate GOP’s tax reform bill conducted by Congress’ Joint Committee on Taxation, the proposed overhaul would raise taxes for 13.8 million Americans.
Hatch downplayed the analysis by congressional tax experts, saying “a relatively small minority of taxpayers could see a slight increase in their taxes.”
The committee’s senior Democrat, Sen. Ron Wyden of Oregon, said the legislation has become “a massive handout to multinational corporations and a bonanza for tax cheats and powerful political donors.”
The analysis found that the Senate measure would increase taxes in 2019 for 13.8 million households earning less than $200,000 a year. That group, about 10 percent of all U.S. taxpayers, would face tax increases of $100 to $500 in 2019.
There also would be increases greater than $500 for a number of taxpayers, especially those with incomes between $75,000 and $200,000. By 2025, 21.4 million households would have steeper tax bills.
Hatch responded Tuesday to concerns raised by those in opposition to the tax overhaul. He disputed the claim that the tax bill was a “massive tax cut for the rich.”
“That particular claim was repeated, I believe, by almost every minority member of this committee,” Hatch said in his opening remarks for the second day of consideration of the bill. “The problem with that claim is that it’s just not true.”
“The Joint Committee on Taxation, the nonpartisan congressional scorekeeper, has concluded that, not only does the bill maintain the current level of progressivity in the tax code, but that the largest tax cuts – in terms of percentage of income – will go to middle-income earners.”
Hatch also repeated the assertion that 13.8 million Americans represented a small portion of taxpayers.
“Members cited a JCT table concluding that some in the middle class may see a tax increase under the bill,” he said, “while those same members completely ignored the fact that the very same data showed that the vast majority of middle class taxpayers – about 90 percent – were either going to get a tax cut or, at the very least, be held harmless under the bill.”
Some in the Senate are also leery of the proposed tax overall due to it possibly adding $1.5 trillion to the national debt over the next decade.
Associated Press writers MARCY GORDON, BRUCE SCHREINER and KEVIN FREKING contributed to this report.
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