U.S. Sen. Joe Manchin: Tax Plan Doesn’t Benefit The Middle Class
WHEELING — A proposed tax plan before the U.S. House of Representatives would add nearly $1.7 trillion to a national debt that already exceeds $20 trillion, according to Sen. Joe Manchin.
The Senate is expected to receive its version of a tax reform bill today, while the House votes on its legislation next week, he told reporters during a conference call Wednesday.
Manchin — a self-described centrist Democrat — believes Republicans are putting together a tax plan “under a cloak of secrecy” in which Democrats have no input, and White House liaison Mark Short told him he should arrange a meeting in which Democrat senators could be briefed on the legislation.
Manchin said the group assembled Tuesday night, with 12 senators in attendance. They met with Gary Cohn, economic adviser to President Donald Trump and architect of the tax plan being pushed by the White House.
Senators learned during the meeting the Congressional Budget Office expects the tax plan to add $1.7 trillion to the national debt over the next 10 years, and Manchin said his read on the bill is that only the wealthy would benefit.
“When I talked to the president, he told me the tax cut was not going to be for the wealthy, but for the working-class people,” Manchin said. “If it’s for middle-class working people — that’s West Virginia — then I want that. But that’s not what I’m seeing. I have to assume this is not the president’s plan.”
While the House tax plan would increase the standard deduction for taxpayers, any gains for the middle class would be negated as other tax credits — such as the “child tax credit” — would be phased out in five years, Manchin said.
The federal historic tax credit of 20 percent for those redeveloping historic properties would be eliminated under the measure — just as the West Virginia Legislature has voted to increase the state tax credit to 25 percent.
And under present tax laws, estates valued at less than $5 million — or $10 million for a married couple — are not subject to estate tax. The House tax plan eliminates the estate tax entirely, which Manchin said would cost the nation $250 billion annually.
The middle class in West Virginia is defined as those earning $30,000 to $80,000 annually, according to Manchin.
“And they’re looking for relief,” Manchin said. “Temporary relief is not going to be sufficient, (in addition to) all the debt we will be incurring. It’s going to the protection of those millionaires, billionaires and zillionaires out there. I can’t figure it out. At the end of the food chain, those who need it the least seem to be the ones who benefit the most.”
Manchin said he would continue to work with the Trump Administration to find a solution.
“But it’s just very troubling right now,” he said.
Sen. Shelley Capito, R-W.Va., meanwhile, is encouraging Democrats to join the Republican move toward tax reform.
“Tax reform is absolutely essential to helping West Virginia families, small businesses and communities recover and grow again,” she said. “Doing nothing is not an option — and that’s why I’m encouraging Democrats in the Senate to join our effort to make the tax system simpler, fairer and easier to understand.”
She said tax reform will give a boost to the middle class, and allow small businesses to invest earnings in their communities.
“In the past, many Democrats have expressed support for ‘meaningful’ tax reform — and now we have that opportunity,” Capito said. “The need for tax reform hasn’t changed, but leadership in Washington has. It’s time for Democrats to join the majority of Americans who want a better tax system and work with President Trump and Republicans to accomplish that goal.”
Last week, Rep. David McKinley, R-W.Va., partnered with Rep. Rod Blum, R-Iowa, to organize a bipartisan letter to members of the House Committee on Ways and Means, urging that the Federal Historic Tax Credit be kept as part of any new tax plan. McKinley and Blum were joined by 32 other House members in signing the letter to committee leadership.
McKinley spokesman Alec Thomas said no progress has been made yet by the effort, but that McKinley “is continuing to lead the charge.”