Elections buoy tax bill fight

Democrats hopeful boost helps motivate takedown of GOP plan

WASHINGTON — Feeling the political wind at their backs arguably for the first time in five years, Connecticut’s Democratic lawmakers basked in the glow of Democratic electoral victories and predicted a momentum shift against the GOP tax bill.

“The high level of turnout is a clear signal to our Republican friends they are facing an energized electorate that understands how cruel and misguided President Trump’s policies are,” said Sen. Richard Blumenthal. “It’s what enabled us to defeat Republican ‘repeal-and-replace’ health care, and it’s the same sense of outrage that will ultimately enable us to defeat the tax plan.”

In an off-year election where turnout generally is a problem for Democrats, party candidates handily defeated Republicans in key gubernatorial races in Virginia and New Jersey.

Connecticut made its own contribution to the Democratic sweep, said Rep. Rosa DeLauro.

“Last night’s elections in Connecticut are further proof that Connecticut voters and taxpayers are fed up with what is happening in Washington, D.C.” she said. “Across our state, Democrats flipped 18 mayors’ offices and town councils. People are engaged, and they are fighting back against the Trump-Ryan agenda — including their latest tax-cut giveaway to millionaires, billionaires and corporations that will raise taxes on the middle class.”

“Voters and taxpayers are fed up ... and they are fighting back.” Rep. Rosa DeLauro

On Wednesday, Republicans showed little interest in scaling back the dimensions of their tax bill, which would consolidate seven brackets into four, reduce the corporate tax rate from 35 percent to 20 percent, phase out the estate tax and double the standard deduction to $24,000 per married couple and $12,000 per individual.

House Speaker Paul Ryan suggested the electoral losses were attributable in part to GOP failure to get its agenda signed into law.

“We’ve got a promise to keep,” Ryan said Wednesday. “We’ve got to get out and win our promise.”

In passing a budget that set up the GOP tax-bill debate, Republicans agreed to a $1.5 trillion tax cut that would have to be offset by tax revenues at the end of a decade. For that reason, Republicans are searching for cancellation of tax breaks, many of which are popular with the public.

Among them: Tax credits for adoption, renovating historic buildings, business and industrial training and cancellation of the deduction for large out-of-pocket medical expenses.

Blumenthal characterized the elimination of the adoption credit as particularly cruel.

“It’s a matter of simple humanity,” he said. “For a family that wants to open its home and heart to a child who needs them, why eliminate that deduction? Where is your heart?”

The element of the GOP measure with the greatest impact in Connecticut may well be loss of the state and local tax deduction — SALT, for short.

Under the GOP measure before the House, propertytax deductions would be capped at $10,000 and state income tax payments would not be deductible at all.

Trump administration officials have insisted that, when all the features of the tax bill are taken into account, taxpayers in Connecticut and other states who now depend on the SALT deduction will come out ahead.

In addition, Republicans estimate that the corporate tax deduction would yield an average $4,000 for taxpayers, and that a family of four earning $59,000 would get a tax cut of $1,182.

DeLauro, Blumenthal and other state Democrats have consistently characterized the bill as a giveaway to the wealthy at the expense of the middle class, with elimination of SALT as the marquee element for high-tax states like Connecticut.

Loss of SALT as well as another element of the GOP plan —capping mortgage interest on new home loans at $500,000 —would hurt the Connecticut housing market, a spokeswoman for the state’s main homebuilder association said.

“It could tip us into recession,” said Joanne Carroll, spokeswoman for the Home Builders and Remodelers Association of Connecticut, noting that a middle-class home in the state actually is in the price range of $750,000 to $2 million. “It really is very disturbing.”

The GOP’s Senate version reportedly does away with the SALT deduction entirely, with no $10,000 property-tax sweetener.

A spokeswoman for the state’s major hospital association questioned the wisdom of eliminating the deduction for costly out-ofpocket medical expenses.

“We are concerned that patients who use this deduction will suffer as a result of this elimination,” said Elizabeth Hamilton, spokesman for the Connecticut Hospital Association.” Tax reform should not come at the expense of the sickest and most vulnerable among us.”