Dems vow to repeal parts of GOP tax law

Dems vow to repeal parts of GOP tax law
© Greg Nash

Democrats are vowing to undo parts of the GOP’s tax-code overhaul if they win back control of the House in November, hoping President TrumpDonald John TrumpMark Kelly clinches Democratic Senate nod in Arizona Trump camp considering White House South Lawn for convention speech: reports Longtime Rep. Lacy Clay defeated in Missouri Democratic primary MORE’s first major domestic achievement will be a liability for the Republicans in the midterm elections.

The effort is reminiscent of the Republicans’ long-drawn campaign to hammer away at the Affordable Care Act and turn President Obama’s signature health-care expansion into a down-ballot albatross for the Democrats — an effort that helped the Republicans retake the House with sweeping election victories in 2010.

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“We should repeal it and I think we should offer an alternative tax plan, which is we’re going to provide the tax relief to the middle class and the working class,” said Rep. Ro KhannaRohit (Ro) KhannaSchiff, Khanna call for free masks for all Americans in coronavirus aid package The Hill's Morning Report - Presented by the Air Line Pilots Association - Progress slow on coronavirus bill The Hill's Morning Report - Presented by the Air Line Pilots Association - Biden VP possible next week; Meadows says relief talks 'miles apart' MORE (D-Calif.).

Democratic leaders are encouraging their troops to stage district-based tax-reform “teach-ins” designed to convince voters “what this tax scam means to families,” in the words of the direct appeal from House Minority Leader Nancy PelosiNancy PelosiNegotiators hit gas on coronavirus talks as frustration mounts Hillicon Valley: NSA warns of new security threats | Teen accused of Twitter hack pleads not guilty | Experts warn of mail-in voting misinformation Schiff, Khanna call for free masks for all Americans in coronavirus aid package MORE (D-Calif.).

Republicans are ready to hammer Democrats for vowing to repeal much of the tax law, arguing their opponents would be foolish to run on a message of raising taxes.

“I would welcome Democrats running for election based on, ‘Let us slow down the American economy, raise taxes and make sure people’s paychecks are stagnant for another decade,’ ” House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyStimulus checks debate now focuses on size, eligibility Pelosi huddles with chairmen on surprise billing but deal elusive Trump signs executive orders aimed at lowering drug prices MORE (R-Texas) told reporters earlier this week.

“That would be a terrible campaign theme for them to run on, but I welcome them to do it,” he said.

Republicans think the new law will ultimately be to their benefit, noting that polls show support growing. A Monmouth University poll found voters evenly split between approval and disapproval of the law, though it also found that more people expect to see their taxes go up than see their taxes go down.

Democrats are offering few details about what a replacement plan would look like, recognizing that legislation to roll back parts of the law won’t get far while Trump is in the White House. But painting in broad strokes, the lawmakers say they want to shift a bulk of the law’s benefits from the wealthy to the middle class.

“The polling on this bill is terrible for them,” said Rep. Jan SchakowskyJanice (Jan) Danoff SchakowskyDemocrats exit briefing saying they fear elections under foreign threat Democrats introduce bill to repeal funding ban on abortions abroad Trade negotiations mustn't short-circuit domestic debate MORE (D-Ill.). “Americans don’t like it because they think they’re getting crumbs and people like Donald Trump are getting, literally, millions of dollars.”

The tax law Trump signed in December lowers the corporate tax rate from 35 percent to 21 percent. It also lowers rates across the board for individuals and creates a new deduction for income from noncorporate businesses.

No Democrats voted for the law, saying it’s a “scam” that helps the wealthy at the expense of working families. Democrats also resented the partisan process in which the legislation was drafted and a lack of hearings on legislative text.

Democrats are particularly critical of provisions cutting the top individual tax bracket from 39.6 percent to 37 percent and raising the threshold for exemption from the estate tax, both of which benefit wealthy people. They also strongly oppose the cap on the state and local tax deduction, which hurts the rich but also impacts others in high-tax states such as New York, New Jersey and California.

“The state and local tax deduction alone is an assault on the livelihoods and the property values of millions of Americans,” said Rep. Jamie RaskinJamin (Jamie) Ben RaskinFive takeaways from Fauci's testimony GOP lawmakers comply with Pelosi's mask mandate for House floor Five takeaways as panel grills tech CEOs MORE (D-Md.). “The doubling of the estate tax exemption is a comical giveaway to the richest people in the country. And their territoriality provision is an invitation to businesses to export jobs and to offshore their operations.”

The corporate rate cut poses a question, as Democrats have long supported a reduction — just not one as steep as the GOP bill.

“I agreed to the corporate rate deduction to 25 percent and nothing less,” said Rep. Bill PascrellWilliam (Bill) James PascrellLawmakers urge administration to remove tariffs on European wine and spirits amid coronavirus pandemic The Hill's Campaign Report: Florida's coronavirus surge raises questions about GOP convention New Jersey Rep. Bill Pascrell wins Democratic primary MORE (D-N.J.).

Senate Minority Leader Charles SchumerChuck SchumerSchiff, Khanna call for free masks for all Americans in coronavirus aid package Meadows: 'I'm not optimistic there will be a solution in the very near term' on coronavirus package Biden calls on Trump, Congress to enact an emergency housing program MORE (D-N.Y.) told reporters shortly after the tax bill’s passage that he thinks most of the law should be revamped.

“There are probably a small number of provisions we might not repeal,” he said. “It certainly would need drastic overhaul aiming it at the middle class, not the wealthy and powerful.”

Pelosi acknowledged Democrats will need to retake the House to have any chance of repealing and replacing the tax law.

“It may have to be a ‘replace and repeal’ — replace them and repeal the bill,” she said.

But Pelosi also said that, to endure, any tax reforms should be bipartisan. And she left the door open for a low corporate tax rate.

Liberal activists are also getting involved. The Not One Penny coalition has organized a series of events making the case for the need to repeal the “most harmful” provisions in the new law. Several Democratic politicians have participated or are planning to participate in the group’s events, including Pelosi, Rep. Debbie Wasserman SchultzDeborah (Debbie) Wasserman SchultzMichelle Obama wishes Barack a happy birthday: 'My favorite guy' Florida county official apologizes for social media post invoking Hitler  The Hill's Coronavirus Report: Rep. Lauren Underwood says Americans face economic crisis if Senate fails to act on unemployment benefits extension; US surpasses 4 million cases, 1,000+ deaths for third straight day MORE (Fla.) and Rep. Katherine ClarkKatherine Marlea ClarkRevered civil rights leader Rep. John Lewis lies in state in the Capitol Leaders call for civility after GOP lawmaker's verbal attack on Ocasio-Cortez How to save child care? The rural electrification of America provides an answer MORE (Mass.).

Not One Penny spokesman Tim Hogan said Democrats should hit Republicans hard on the tax law in the midterms and work on repeal moving forward.

“It would be wise for Democrats to continue the fight and show that they will do what they can to make sure the economy works for everyone, not just the wealthiest,” he said.

Rep. Sandy Levin (D-Mich.), a senior member of the House Ways and Means Committee, suggested Democrats should be careful not to over-promise. Just as the Republicans had no chance of passing Affordable Care Act repeal while Obama was in the White House, he cautioned, the Democrats face near impossible odds of repealing the Republicans’ tax reforms while Trump holds the veto pen.

“It’s important for us to take back the House and the Senate so we can make that effort,” Levin said. “[But] as long as the president is the president, we’re not going to have two-thirds to override a veto.”