Washington, DC
While details of President Donald Trump’s tax reform proposals haven’t been nailed down, U.S. Rep. Richard Neal, D-Springfield, said that what he’s hearing so far points to tax changes that might favor the rich.
In the weekly Democratic address taped this week, Neal rejected a tax overhaul framework hatched by Trump and Republican lawmakers.
In the address, he said what’s happening is clear.
“Under the Republican plan, tax revenues from individuals would rise by over $2 trillion, while revenue from corporations would drop by over $6 trillion,” he said. “This means more of the tax burden will be shifted from big corporations to working families.”
In a phone interview with The Eagle on Friday, Neal said that while there are no specifics yet in Trump’s plan, ideas that include eliminating the state and local tax deduction, and reducing the mortgage interest deduction, could spell trouble for the middle class.
Neal says that plans to kill the estate tax are another sign.
“They tilt to the top,” he said.
And Neal said that eliminating the state and local tax deduction could hit hard in Massachusetts, where many residents struggle to keep up with local property tax payments.
The Boston Globe reported that the state is right behind Connecticut, New York, New Jersey and California as states whose taxpayers would see the highest increase in federal taxes under Trump’s proposals.
Trump’s plan, Neal said, is to “borrow $1.5 trillion to give a tax cut to people at the top.”
For individual taxes, Trump proposes to reduce the top bracket rate from 39.6 percent to 35 percent.
In his address, Neal said the nonpartisan Tax Policy Center said “80 percent of the tax cuts in the Republican plan would go to the top 1 percent.”
Neal and other members of the House Ways and Means Committee met with Trump last month for a general discussion about tax policies. Neal, the highest-ranking member of the committee, told Trump that tax reform should benefit the middle class.
And Trump has said he wants to negotiate with Democrats on that point. Some Republican lawmakers have expressed nervousness that a plan that only benefits the rich will surely fail.
“We have to get away from the argument that tax cuts pay for themselves, and if you have these big tax cuts, that somehow they will filter down to the middle class,” Neal said. “We have to be careful not to have [tax benefits] concentrated at the top.”
In a tweet this month, Neal, who is also on the tax-writing committee, said Trump’s plan to revive the nation’s “competitive edge” with a new tax system was clear on the effect back home.
“Millionaire households make up 0.8% of the population in #Massachusetts but would receive 68.4% of the tax cuts under the #GOPBudget,” he wrote.
The tax system, unchanged since 1986, needs fixing, Neal said, referring to that year’s bipartisan reform effort.
“Everyone’s in agreement that the tax system is anachronistic,” he added.
But hammering out details is where change can get dicey.
“We’re just getting ready for what’s going to be a contentious few months on the issue,” he said. “It’s a chance to go forward in a bipartisan manner, but that remains to be seen.”
