A proposed tax reform package that could be before the Senate as early as this week has a good chance of passing, U.S. Rep. Jim Jordan told a group of Champaign County business leaders on Monday.
Republicans have argued the tax plan would benefit families and businesses by increasing the standard deduction and child tax credit and cutting corporate tax rates. Democrats have criticized the proposed tax legislation as a giveaway to the rich.
“I do feel cautiously optimistic we’ll get tax reform legislation done before the end of the year,” Jordan, R-Urbana, said.
A recent report released by the nonpartisan Congressional Budget Office says the tax bill would add about $1.4 trillion to the federal deficit over the next decade.
U.S. Sen. Sherrod Brown, D-Ohio, said during testimony on the bill that the beneficiaries are the same corporations that have been rewarded for sending American jobs overseas.
“If you want to cut taxes for the middle class, why don’t you cut taxes for the middle class?” Brown said.
Jordan countered it would lead to economic growth to make up for some of those losses, although he argued spending cuts and welfare reform also should be required in subsequent legislation.
“We’ve got to get to 4 or 4.5 (percent) to be able to grow at a rate that can allow us to deal with a $20 trillion debt,” Jordan said of economic growth. “If you get growth moving in the right direction, then you’ve got to cut spending.”
Several business officials who attended the meeting asked about various issues, including raising concerns about a lack of available workforce.
Jordan also pushed for welfare reform, which he argued should include work requirements for able-bodied adults. Last year, Jordan proposed legislation that would require able-bodied adults without dependents to work at least 80 hours per month, or take part in vocational training to continue to receive benefits. It included more lenient requirements for families with children.
“When you require something for the benefit, what happens is a lot of people will forego the benefit and just get a job,” Jordan said.
The Senate version of the tax reform bill includes a provision that would eliminate the requirement that most Americans purchase health insurance, which Jordan said should have been included in the House version of the bill.
He argued Republicans made a mistake by trying to repeal and replace the Affordable Care Act, known as Obamacare, at the same time. Instead, he argued a simple repeal would have forced Democrats to the bargaining table.
“It was just poor strategy,” Jordan said of Republican efforts to repeal the ACA. “That’s why we advocated a two-bill strategy.”
Brown has argued including a repeal of the individual mandate in the tax reform package would cause millions of Americans to lose health insurance.
“Tax reform should be about cutting taxes for working families, not raising the cost of their health insurance,” Brown said. “It’s outrageous that senators, whose own health care is paid for by American taxpayers, would try to take health care away from working families in order to cut taxes on corporations that send jobs overseas.”
Some local business officials who attended the meeting said in general, the tax reform bill would provide some benefits to local manufacturing firms.
Mark Hunter, controller at Weidmann Electrical Technology in Urbana, said the corporate tax cuts might not translate directly into higher wages for employers. But he said cutting the corporate tax rate would allow the company to increase its capital spending, and likely expand and hire more employees.
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“The wages are going to go up because competition is driving it up,” Hunter said. “We try to do whatever we can to maintain our current workforce.”