Democrats Attack Tax Bill as a ‘Middle-Class Con Job’:

Democrats Attack Tax Bill as a ‘Middle-Class Con Job’:

Senator Ron Wyden of Oregon, left, the ranking member on the Finance Committee, and other senators met with President Trump at the White House this month. CreditDoug Mills/The New York Times

WASHINGTON — Republicans will pitch their tax bill this week as a gift to the middle class, but Democrats will call it a Trojan horse: a windfall for big business and the rich dressed as a tax cut for workers.

The tensions over who will benefit from the sweeping tax rewrite were on display during an hourlong meeting last week between President Trump and Senate Finance Committee members. Democrats who attended, including many whose states Mr. Trump won, said the president agreed with every point raised on the subject of tax cuts for the middle class. At the end of the meeting, Senator Ron Wyden of Oregon told Mr. Trump that the tax bill Republicans were drafting would not deliver on his promises to the middle class and would instead benefit corporations and high earners.

Mr. Trump looked at his top economic advisers, waved his hand, and said, “Take care of it,” Mr. Wyden recalled in an interview.

Democrats have little expectation that Republican lawmakers will take heed when House lawmakers introduce their tax bill next week. And Mr. Wyden and other Democrats are not waiting: They are already attacking the legislation as a bait-and-switch in the hopes that they can find a path forward to a bipartisan tax bill that they believe will truly benefit middle-class Americans.

“This is a middle-class con job,” Mr. Wyden said.

Democrats hope that by killing the Republican bill, they can work with Mr. Trump to create bipartisan legislation that achieves a middle-class tax cut.

“There are areas where we can come together,” said Senator Chuck Schumer, Democrat of New York and the minority leader, “but there’s no way we can come together on raising taxes on the middle class. That’s the Achilles’ heel of their bill.”

Republicans are putting the middle class at the forefront of the discussion of their plan to pass the most sweeping rewrite of the tax code in a generation. Their primary claim is that cutting taxes on businesses, including reducing the top corporate tax rate to 20 percent from 35 percent, will generate large wage gains for American workers.

The House speaker, Paul D. Ryan, Republican of Wisconsin, told reporters on Thursday that “the entire purpose of this tax bill is to cut middle-class taxes.” But he warned earlier in the week that, to meet Democrats’ demands to avoid cutting taxes on corporations and wealthy individuals, “we would basically have to destroy the growth elements of this tax reform plan.” Republicans argue that lightening the tax burden on businesses will generate economic growth to help offset the cost of the plan.

Senator Mitch McConnell of Kentucky, the majority leader, suggested in an op-ed on NBC.com this month that antipathy toward Mr. Trump was keeping Democrats from joining the tax effort. “Here in the Senate, the need for tax reform is loudly supported by Democrats — or at least it was, until the last election,” he wrote.

Crucial details of the House and Senate versions of the plan are still unknown, in part because Republicans are struggling with how to pay for the tax cuts they are envisioning. Lawmakers have cleared the way for a $1.5 trillion tax cut but are considering a plan that would cost much more than that, which will require them to find a way to offset the cuts by ending tax breaks and employing accounting maneuvers to stay within that defined amount.

Many of the details still in flux are important because they would affect middle-class taxpayers directly, including the boundaries of income-tax brackets, the size of an expanded child tax credit and the fate of some deductions that Republicans had targeted for elimination, such as one for state and local taxes paid.

A framework for the plan, released by Republican leaders in September, calls for cutting corporate rates; nearly doubling the standard deduction for individuals and couples; reducing the number of individual income tax brackets to three or four, from seven; overhauling the way in which the United States taxes multinational corporations; and taxing so-called pass-through entities, which are businesses whose owners pay taxes on profits through the individual tax code, at a rate of 25 percent.

Depending on how the details are filled in, such a tax bill could reduce income taxes on nearly all middle-class families — or it could raise them for millions of middle-class families, by eliminating deductions and other tax breaks and not reducing rates enough to make up for that.

Publicly, Republicans have long said Democrats should — and will — vote for their tax bill. Mr. Trump has sought to pressure, in particular, a handful of Democratic senators from states he won, including Joe Manchin III of West Virginia, Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana.

Mr. Trump invited several Democrats to the White House this month, along with every Republican on the Finance Committee, and placed Senator Claire McCaskill of Missouri, another Democrat from a state he won, next to him at the table. Before the meeting, Mr. Trump joked that he expected to get “unanimous support” from Democrats on the bill.

The Democrats left pleased with the president’s talk. “He said all the right things there,” said Senator Sherrod Brown, Democrat of Ohio, who delivered copies to Mr. Trump of two tax bills focused on the middle classthat he is sponsoring. “He said, over and over, this is a middle-class tax break; this is not for rich guys like me.”

In the House and Senate, though, Democrats say they have had little input in drafting the tax legislation. Republican lawmakers have been meeting in recent weeks, in both chambers, to hash out the final language for the legislation. Democrats say they have not been invited.

“It’s hard to say that we’re participating in a tax negotiation,” said Representative Jim Himes, Democrat of Connecticut, who is chairman of the moderate New Democrat Coalition. “We’re not throwing up our arms. It’s the start of a process.”

Mr. Himes and Democrats on the House Ways and Means Committee, including Suzan DelBene of Washington and Richard E. Neal of Massachusetts, the committee’s top Democrat, said they have discussed the bill with the committee chairman, Representative Kevin Brady, Republican of Texas. But, they said, Republicans have not agreed to some basic Democratic requests for the bill, including that it not add to the federal deficit.

Past overhauls of the tax code have been marked by bipartisanship, most recently in 1986, when Democrats such as Senator Bill Bradley of New Jersey joined Republicans such as Senator Robert Packwood of Oregon in delivering a bill to President Ronald Reagan.

In recent years, Mr. Wyden has written two sweeping tax overhaul bills with Republican Senate colleagues, first with Judd Gregg of New Hampshire and then with Dan Coats of Indiana, who is now the director of national intelligence. Some pieces of those plans are echoed in the Republican framework this year, including the consolidation of income tax brackets on the personal side, and the expansion of the standard deduction. (Mr. Wyden’s plans proposed to nearly triple it.)

But Mr. Wyden is sharply critical of the bill Republicans are drafting now, which he said includes gifts to big businesses and the wealthy, “funny math” for budget scoring that will assess the cost of the plan, increased deficits and “a bunch of false promises to the middle class.” He said he hoped that the bill would collapse and that Mr. Trump would turn to a bipartisan effort centered on the middle class instead.

 

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