By JAKE ZUCKERMAN
CHARLESTON, W.Va. — The U.S. House of Representatives is scheduled to vote Thursday on a major overhaul of the tax code, and all three West Virginians in the chamber have indicated support for the bill.
A spokeswoman for Rep. Evan Jenkins, R-W.Va., said in an email that Jenkins will support the bill; Rep. David McKinley, R-W.Va., said in a floor speech Wednesday evening that he will support the bill; and although a spokesman for Rep. Alex Mooney, R-W.Va., said he will not publicly announce his vote before it’s cast, Mooney has publicly indicated his support for an earlier version of the bill in a radio interview.
Last month, McKinley was the only West Virginian to oppose the GOP budget that passed the House. He would not go into specifics after the vote regarding what his exact problems with that bill were.
The Senate released its own version of a tax reform bill this week. That bill includes the repeal of the individual mandate to obtain health insurance, a cornerstone of the Affordable Care Act. If both bills pass their respective chambers, a conference committee between the two will likely negotiate a compromise version of the bill, which each chamber would then have to approve.
The House version of the bill would make changes up and down the existing tax code. On the individual side, it reduces the number of income distribution brackets, keeping the rate for the highest earners at 39.6 percent. The bill also offers a mix of repealing several exemptions (e.g. certain personal exemptions, state and local tax deductions, and deductions for interest on student loans) while adding some perks (roughly doubling the standard deduction and increasing the child tax credit and temporarily increasing the family tax credit).
The bill rolls back taxes aimed at wealthier families, such as the estate tax, and repeals others outright, such as the alternative minimum tax. It also reduces the corporate tax rate to 20 percent from up to 35 percent.
According to IRS data aggregated by the House Majority Leader’s Office, in West Virginia, 82.8 percent of residents claim the standard deduction, 15.5 percent claim child tax credits and 1.3 percent file with the alternative minimum tax.
Various tax policy centers and think tanks have offered different analyses of the bill, which the congressional Joint Committee on Taxation has estimated will add $1.4 trillion to the federal deficit between 2018 and 2027.
The general consensus among the groups is that, while most income tiers will receive a tax cut, the biggest cuts centralize around the highest-earning Americans.
“We find the legislation would reduce taxes on average for all income groups in 2018 and 2027,” states an abstract of an analysis of the plan from the Tax Policy Center. “The largest cuts, in dollars and as a percentage of after-tax income, would accrue to higher-income households. However, not all taxpayers would receive a tax cut under this proposal — at least 7 percent of taxpayers would pay higher taxes under the proposal in 2018, and at least 24 percent of taxpayers would pay more in 2027.”
According to state-by-state data from the Institute on Taxation and Economic Policy, while the middle 20 percent of West Virginian earners would receive 9 percent of tax breaks included in the bill in 2018, the bulk of the cuts — 66 percent — will go to the highest-earning 20 percent of individuals in the state in 2018.
The rate for the middle 20 percent decreases to 7 percent of the cuts by 2027 as provisions expire, while the rate for the top 20 percent increases to 70 percent in the same time frame.
In raw dollars, ITEP’s data show the richest 1 percent of West Virginians would receive an $18,830 tax cut in 2018, while the middle 20 percent of earners would receive a $450 tax cut.
Sean O’Leary of the West Virginia Center on Budget & Policy said Wednesday it’s worth noting that many of the tax breaks for corporations and wealthy families are permanent, while the credits targeting middle class families last only five years.
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