Tax bill

Rep. Martha McSally said the tax bill that went through the House and Senate on Tuesday night contains a repeal of a little-known facet of the Affordable Care Act brought to her attention by deceased Green Valley resident Loren Thorson.

With polls showing the legislation is immensely unpopular, Rep. Martha McSally had some advice for those unsure about the tax bill that went to a vote Tuesday in Congress: Trust the facts, not the hype.

“The hysteria we're hearing is remarkable, but if you look back to the Reagan tax cuts, Democrats voted for it and supported it,” she said minutes before voting. “The misinformation and the overplaying of the fear is just unbelievable. The best counter to that is when people see money in their paychecks.”

The Republican tax reform bill, which passed the House on Tuesday afternoon and was being debated by the Senate yesterday evening, overhauls the tax code and repeals part of the Affordable Care Act. It's the first major legislative win for President Trump, who is expected to sign it this week. But that won't come until after the revotes on it Wednesday because several provisions were ruled out of order in the Senate.

Critics have picked apart the House and Senate versions of the bill for months but stepped up efforts after the combined version was released Friday night. They say the bill is weighted toward business, benefits the rich, doesn't do enough for the middle class and will leave millions uninsured.

The legislation drops the corporate tax rate from 35 percent to 21 percent, repeals the corporate alternative minimum tax and almost doubles the standard deduction for individuals. It also does away with the penalty for Americans who don't purchase insurance under the ACA. The Congressional Budget Office estimates that could lead to 13 million more people without health coverage and could mean higher premiums on the individual market.

McSally, whose Congressional District 2 includes Green Valley and Sahuarita, said the tax code hasn't had a meaningful update in 31 years and that it has been “holding us back” from competing globally.

“We've needed a simplification of the tax code for a long time,” she said. “I believe it's going to put our economy into afterburner.”

Among the criticisms of the legislation:

It increases the national debt: McSally said there will be an “initial dip while we're making an investment in our future” after the legislation goes into effect but that economic growth will kick in. She stopped short of saying the legislation would pay for itself outright, indicating it would take a combination of other tax cuts, rolling back “oppressive regulations” and offering job opportunities and training.

Medicare and Social Security could be targeted for cuts: “We need to make sure we keep our fiscal house in order,” McSally said, but was adamant that future cuts would not include Medicare or Social Security.

House Speaker Paul Ryan called Medicare the "biggest entitlement that's got to have reform" in a Dec. 6 radio interview. “We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said on the Ross Kaminsky talk radio show out of Denver. "Frankly, it's the health care entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements — because that's really where the problem lies, fiscally speaking.”

McSally said she was not aware that Ryan had mentioned Medicare as a target for cuts; many members of Congress, including McSally, have said Medicare and Social Security are not on the table for cuts.

She said the new year would bring a focus on shoring up infrastructure and on “meaningful welfare reform” that gives people job skills to get back into the workforce.

Middle class tax cuts will roll back: McSally said a typical family of four making $73,000 would see a $2,059 tax cut in 2018. That comes from a lower tax rate, doubled standard deductions and a doubled child tax credit. However, that rolls back after eight years for what McSally calls “technical reasons” having to do with “wonky regulations.” She said the cuts could have been made permanent with 60 votes, but that would have meant relying on Democrats to get on board.

“We are going to make those permanent,” she said of the cuts. “On the individual rates, we have every intention of extending these well into the future.”

Under current law, there is a $6,350 standard deduction for single taxpayers and $12,700 for married couples, filing jointly. Personal exemptions of $4,050 allowed for each family member. Under the tax bill, there would be a $12,000 standard deduction for single taxpayers and $24,000 for married couples, filing jointly. Personal exemptions are repealed, which could hurt bigger families.

The medical expense deduction is retained, but only for two years: This is a little-talked-about point in the ACA that former Reps. Gabrielle Giffords and Ron Barber worked on with Loren Thorson, a Green Valley man who brought it to their attention years ago. McSally got on board and pushed it through. The medical expense deduction allows taxpayers to deduct medical expenses that exceed 7.5 percent of their income. It is a benefit for those with very high medical bills. That number was going up to 10 percent under the ACA — and the 10 percent figure already went into effect for those under age 65. The tax legislation keeps that at 7.5 percent for everybody the next two years. McSally said she'll continue to try to make the change permanent.

“I am so excited and I wish Loren were here to celebrate with us,” McSally said of Thorson, who died in 2016. “We are passing exactly what he fought for.”

Overall, several national polls show Americans skeptical of the legislation. A poll released Monday by Monmouth University showed 26 percent of Americans approve of the tax bill, while 47 percent disapprove. A CNN survey released Tuesday showed 33 percent support the proposal and 55 percent oppose it.

McSally said her strategy for rolling out the plan to constituents is to encourage people not to believe what they read on the internet or hear on television.

“Do the math yourself,” she said.

“This is going to provide wage increases, more job opportunities, businesses are going to immediately be able to invest in equipment and deduct that, which is a game-changing provision in here. This is going to boost our economy in a way we haven't seen in a long time,” she said.

McSally wouldn't address a Senate run, saying only that she was “focused on our work here in D.C., and I'll keep you posted on any future plans.”

Dan Shearer | 547-9770