Lawmakers unveiled major tax reform on Thursday, with Pennsylvania’s federal senators at odds over the plan.
“Republicans in the House have written a great tax reform bill that will put more money in the pockets of hardworking, middle-income Pennsylvanians and will produce a healthier, stronger economy,” U.S. Sen. Pat Toomey, R-Pa., said in a prepared statement.
He said he believes the House should pass the measure.
U.S. Sen. Bob Casey, D-Pa., thinks differently.
“Congressional Republicans have taken great pains to spin their tax scheme as great for the middle class, but a few marginal changes don’t change the fact that their plan is fundamentally a massive giveaway to the wealthy at the expense of the middle class,” he said.
Under the plan, the individual tax rates for low- and middle-income Americans would be lowered to 0, as well as 12 percent, 25 percent and 35 percent. Meanwhile, 39.6 percent would continue to be the rate for Americans who earn more than $1 million.
The standard reduction would also roughly double –– from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
Also under the proposal, a new family credit would be established, which would include expanding the child tax credit from $1,000 to $1,600 to assist parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help families with everyday expenses.
“By eliminating key deductions like the deduction for state and local sales and income tax and the $4,050 personal exemption per family member, some middle class families in Pennsylvania could see their taxes rise while the super-rich get a windfall,” Casey said.
The plan also calls for a reduction of the tax rate on Main Street businesses to no more than 25 percent. The corporate tax rate would also be lowered to 20 percent from 35 percent.
“This Republican tax bill, which provides a $1.5 trillion tax cut for corporations, comes on the heels of passage just last week of a Republican budget which proposes cutting Medicare and Medicaid by the same amount, $1.5 trillion,” Casey said.
Toomey said he and his Senate Finance Committee colleagues are working diligently to finish their own comprehensive tax plan.
“The shared goal of Congressional Republicans and the administration on tax reform remains the same: delivering a direct pay raise to hardworking American families and creating incentives for economic growth with new, well-paying jobs,” he said.