WASHINGTON — With help from U.S. Sen. Cory Gardner of Colorado, Republicans in the U.S. Senate on Wednesday advanced their plan for what would be the nation’s first tax code overhaul in three decades.
Beyond its historical implications are a number of points of debate, one of the biggest being the bill’s impact on the deficit. A nonpartisan analysis projects the Senate bill would increase the deficit by about $1.4 trillion over the next 10 years, but GOP leaders counter that tax cuts would ease that figure.
As Republicans race to pass the bill through Congress, the bill is also drawing a lot of interest and concern in Colorado, from its impact on the middle class to its effect on health care and the state’s wind and beer industries.
Bennet and Gardner take opposite tacks
Colorado’s two U.S. senators are expected to go their separate ways on the tax bill — with Gardner aligning with other Republicans in support and Michael Bennet joining with fellow Democrats in opposition. Gardner said the tax cuts would help “raise wages for working families” and get “America competitive again.” Bennet, in a weekly address held by Democrats, reiterated Democratic concerns that the bill would help the rich at the expense of the lower and middle classes. “Under the Republican tax plan, people making over $1 million a year would receive tax cuts of about $59,000 per year, while families earning $50,000 or less would see just $160 — or $7.50 more each paycheck,” he said. “Tens of millions of middle class families would actually see their taxes go up.”
Marijuana company tax deductions
Gardner said he plans to try and add an amendment to the tax package that would change the law so that marijuana companies could use common tax deductions and credits — such as those for hiring veterans. Those currently are off-limits for the pot industry, and Gardner said he wants to level the playing field. “This would put them in line with other businesses,” said Gardner, who was cautiously optimistic about the amendment’s chances. “It may or may not happen, but I’d like to see it happen.”
Senate bill would keep wind energy tax credit
The Senate bill preserves a temporary tax credit for wind-energy companies that industry officials said is critical for them to stay competitive. That’s in contrast to the House bill, which seeks to more rapidly scale back the subsidy — which already was set to phase out in a few years. The American Wind Energy Association has argued the proposed changes to the Production Tax Credit in the House bill would “put at risk tens of thousands of jobs and at least $50 billion of investment tied to projects already under construction and nearly complete.” About $1.1 billion in wind projects are underway in Colorado, which employs about 7,000 wind energy-related jobs.
235,000 Coloradans could lose health insurance
Included in the Senate bill is a repeal of the fine on Americans who don’t get health insurance, a tenet of the Affordable Care Act, also known as Obamacare. Getting rid of that levy means 13 million fewer Americans would have health insurance, according to the Congressional Budget Office. About 235,000 Coloradans would be among those 13 million, noted one analysis by the Center for American Progress, a liberal think tank. “Those effects would occur mainly because healthier people would be less likely to obtain insurance and because, especially in the nongroup market, the resulting increases in premiums would cause more people to not purchase insurance,” wrote the CBO, which provides independent economic analysis for Congress.
Deficit over next decade could rise by $1.4 trillion
Number-crunchers at the CBO have also estimated the Senate tax bill would add $1.4 trillion to the deficit over the next 10 years. That’s a big number to swallow for Republican lawmakers who have preached fiscal responsibility; a similar estimate for the House bill is why U.S. Rep. Ken Buck, R-Windsor, briefly considered voting against it. (He ultimately voted for it after talking to President Donald Trump and House Speaker Paul Ryan). Gardner, like many Senate Republicans, contends that future “economic growth will more than make up” for the projected deficit spending — though few economists agree.
Colorado’s many breweries would get a tax break
The legislation includes a tax break for all beer makers but smaller breweries — like most of the nearly 350 across Colorado — stand to do well. Those that brew less than 2 million barrels a year would see their taxes halved from $7 to $3.50 per barrel for the first 60,000 barrels they make a year. The big guys would get a cut too: all beer-makers would see a $2 drop in per-barrel taxes for the first 6 million barrels they produce or import, from $18 to $16 per barrel. The tax bill that passed the House doesn’t include this provision, however, so Senate negotiators would have to convince their House counterparts to adapt this language if Senate Republicans can get enough votes for their tax plan.