Connolly Statement Opposing Republican Tax Plan
Congressman Gerry Connolly (D-VA) released the following statement in opposition to the Republican tax plan:
"Congress had a real opportunity to pursue revenue neutral tax reform that would lower corporate rates and benefit the middle class. That is why I am deeply disappointed that the majority has instead elected to pursue a partisan tax plan that asks working families, veterans, and low-income seniors to pay higher tax rates than the wealthiest Americans and largest corporations. As a leader of the New Democrat Coalition, a group of pro-business Democrats, I have written on several occasions to Speaker Ryan and Chairman Brady asking them to partner with us on a tax reform plan that would simplify the tax code, create revenue for infrastructure, and provide middle class tax relief. However, much like their Obamacare repeal gambit, the Republicans in Congress are pursuing a deeply partisan proposal instead of working across party lines on bipartisan solutions.
"I cannot support the plan before us today because it explodes the annual deficit and hurts Northern Virginia families in order to provide a massive windfall to the top 1 percent of earners.
"The bill increases the deficit to the tune of $1.5 trillion over ten years. The nonpartisan Joint Committee on Taxation found that Republicans are asking the American people to stomach a massive deficit increase on the hope and prayer that these tax cuts will pay for themselves. They won’t. This is the same trickle-down narrative Republicans sold to rewrite the tax code in 1981, 2001, and 2003. The 1981 tax cuts were so disastrous that Presidents Reagan and Bush had to enact legislation to raise additional revenue in 1982, 1983, 1984, 1987, and 1990. And in the early 2000s, President Bush took the record surpluses of the Clinton era and created record deficits.
"No one representing Northern Virginia could vote for this tax scam, because this plan is a disaster for Northern Virginia. The plan repeals or limits several tax breaks that are crucial to Northern Virginians, including the state and local tax deduction, the mortgage interest deduction, the student loan interest deduction, and the medical expense deduction.
"The plan includes a partial repeal of state and local tax (SALT) deduction. The deduction for income and sales taxes is repealed, and the deduction for property taxes is capped at $10,000 per household. Although, there are reports that the Senate will repeal SALT entirely. In the Commonwealth, 1.5 million households claim $16.5 billion in SALT deductions. Virginia has the nation’s 4th highest percentage of tax filers claiming a SALT deduction (37%). The 11th District, where 50 percent of tax filers claim a SALT deduction, is one of the top Congressional districts in the nation affected by this change (11th), and 75 percent of our district’s SALT claimants are in the middle income tax brackets. 280,000 households claim this deduction in Fairfax County alone, for an average deduction of $16,535. The bill also caps the mortgage interest tax deduction, which currently saves an average of $2,946 for 144,000 of my constituents, and it eliminated the student loan interest deduction which is claimed by more than 30,000 VA-11 residents for $35 million in deductions.
"Additionally, the tax plan includes the elimination of all deductions for medical and dental expenses, including prescription drug costs, premiums for long-term care insurance, payments to doctors, in-home care, and even nursing home care. In the 11th District, in a given year more than 24,000 tax filers claim medical and dental expenses, totaling roughly $260 million in deductions. This proposal would be catastrophic for the sickest and most vulnerable among us. Those who suffer from a chronic or serious medical condition, are disabled, or need in-home or in-facility medical services for themselves or a loved one will find it even more difficult to afford necessary medical care. I offered an amendment to the bill to restore this important deduction, but Republicans in the Rules Committee refused to even allow for the amendment to be debated on the Floor of the House.
"This bill would also inflict significant harm on our ability to make infrastructure improvements by prohibiting the issuance of tax exempt bonds for so-called private purposes. The repeal would cost my local airports authority, the Metropolitan Washington Airports Authority, $300 million in additional financing costs for its ten-year capital construction program. Many of my colleagues have probably benefited from jumping on the HOT Lanes in Northern Virginia. Well, the I-495 HOT Lanes required $589 million in private activity bonds and the I-95 HOT Lanes received $253 million. I served in local government for 14 years. We use these bonds to partner with the private sector to build roads, tunnels, transit, and build affordable housing. The repeal of private activity bonds exposes Republicans’ insincerity about making vital national infrastructure investments.
"Finally, this plan does not reflect our values and priorities. According to the Tax Policy Center, the after-tax income of the top 1 percent of earners would rise by 2.6 percent in 2027. By contrast, groups in the bottom 80% of the income distribution would see their after-tax income increase by between 0.0% and 0.6%. The top 1 percent would receive more than 50 percent of the benefits of the Republican tax plan by 2027, while 36 million middle income Americans would see a tax increase! The bill would repeal the estate tax, which applies to only the wealthiest 5,000 decedents each year, while nixing the student loan interest deduction and the tax credit available to small businesses that make investments to improve accessibility for individuals with disabilities.
"We can and should do better than this. We need a balanced approach to comprehensive tax reform that establishes a simpler, fairer tax code for all. This is a tortured version of the vision even Speaker Ryan laid out for tax reform. It is not revenue neutral and the cuts that it does include are not even permanent. I encourage my colleagues to oppose this bill."