The six Republicans who represent Kansas in the U.S. House and Senate are expected to vote Tuesday for a massive federal tax overhaul bill designed to lower individual and business obligations and potentially expand the national deficit by $1.4 trillion over the next decade.
The measure was approved 227-203 in the Republican-led House before forwarded to the U.S. Senate, where the partisan margin for passage is expected to be tighter. The objective of GOP leaders has been to put a bill on President Donald Trump’s desk before Christmas that overhauled the tax code and undermined the Affordable Care Act.
U.S. Rep. Lynn Jenkins, the 2nd District Republican who isn’t seeking re-election in 2018, said the plan would improve the incentive for businesses to create jobs and would result in tax relief to hard-working Americans. On the House floor, Jenkins praised the bill’s expansion of college savings plans to include saving money for K-12 private school tuition.
She said the legislation would close special-interest loopholes and “lower rates for everyone. Not just the rich. Not just the poor. Everyone.”
“Kansans know our status quo tax code no longer works for them,” she said. “Kansans know that without rejuvenated and sustained economic growth we will never find the money to pay down our national debt.”
The justification was echoed by U.S. Rep. Roger Marshall, who serves the large 1st District covering the western portion of the state. He referred to the bill negotiated by House and Senate Republicans as a reflection of tax policy sought by President Ronald Reagan decades ago.
“I am proud of the final product that prioritizes hard-working individuals, families and a healthier economy,” Marshall said. “I believe Ronald Reagan would be proud of the work Congress has done.”
U.S. Rep. Kevin Yoder, who serves suburban Kansas City in the 3rd District, and Ron Estes, of the 4th District around Wichita, voted for the bill.
Yoder said the bill would provide relief to the 75 percent of Americans living paycheck to paycheck who endured little or no wage growth over the past eight years.
“We do it primarily by making three vital changes to our tax code. We double the standard deduction, making the first $24,000 of a family’s income tax-free. We double the child tax credit to $2,000 and make it refundable, allowing low-income families to reduce their payroll tax burden. And we lower tax rates for all Americans,” Yoder said.
The Democratic Congressional Campaign committee responded with advertising in the districts served by Yoder and Jenkins that portray the legislation as an “irresponsible tax scam” rushed through by GOP leadership.
“When House Republicans say ‘Merry Christmas,’ apparently it’s only to millionaires, billionaires and large corporations,” said DCCC spokesperson Rachel Irwin. “This tax scam is loaded up with special-interest loopholes and tax breaks for the wealthiest and biggest corporations, while middle-class Kansans get stuck with higher taxes and coal in their stockings.”
Under the bill, the federal corporate tax rate would fall permanently from 35 percent to 21 percent. Owners of businesses organized as LLCs would score a new 20 percent income tax deduction for “pass-through” income, which is similar to a tax reform adopted in Kansas during 2012 and repealed in 2017.
Individual taxpayers would still be subject to seven tax brackets, but the top rate would temporarily fall from 39.6 percent to 37 percent. The standard deduction for a married couples filing jointly would expand from $12,700 to $24,000. The child tax credit would double to $2,000.
The bill limits all state and local tax deductions to $10,000 and doubles the estate tax threshold to assess the top rate on transfers above $11.2 million.
The Congressional Budget Office reported the legislation would add at least $1.4 trillion to the deficit over the next 10 years.
In addition, the bill would remove the penalty for not purchasing health insurance coverage under requirements of the Affordable Care Act.
Democrat Paul Davis, who is seeking the Democratic Party’s nomination for Congress in the 2nd District, said the pass-through tax break in the bill resembled the exemption adopted in 2012 by Gov. Sam Brownback. The deep reduction in state taxes paid by business owners and individuals led to a $700 million reduction in state revenue and deep budget problems. A bipartisan coalition repealed the Brownback era tax cuts during the 2017 legislative session.
“Congress had a wonderful opportunity to reform the tax code to help lift the burden on middle class Kansans who have been left behind in this economy as corporations raked in record profits,” said Paul Davis, candidate for Kansas’ second congressional district. “Instead, they passed a Brownback-style tax giveaway for their wealthiest campaign donors.”
U.S. Sen. Pat Roberts, R-Kan., said every income level would receive some sort of tax benefit from the bill. He expressed admiration for provisions helpful to ranchers and farmers.
“I hope the Senate will approve these long overdue reforms and send them to the president to be signed into law so that Americans may have an extra special holiday this year,” Roberts said.