TAX POLICY PROVIDES FERTILE GROUND EARLY IN US SENATE RACE [+AUDIO]
By Andy Metzger
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, NOV. 7, 2017....U.S. Senate candidate Geoff Diehl has put his campaign's effort into a bid to lower the state's 6.25 percent sales tax and he thinks Congress should preserve state and local tax deductions in its planned tax overhaul bill.
"I agree that we need to focus more on making sure that Massachusetts, a state where we have high state and local taxes, that those deductions remain in place, and I think that’s one of the big reasons that this Senate campaign is so important," the Whitman Republican told reporters Tuesday.
Rep. Geoff Diehl announced Tuesday that campaign volunteers collected 10,000 signatures for a ballot initiative to lower the sales tax to 5 percent. [Photo: Sam Doran/SHNS]
The Tax Cut and Jobs Act under consideration this week by the U.S. House Ways and Means Committee would cap the deduction on many state and local taxes at $10,000, according to a description by the Joint Committee on Taxation.
Targeting one of those taxes at the state level, Diehl's campaign collected more than 10,000 signatures to help advance a ballot question that would reduce the state sales tax to 5 percent. The Whitman state rep is part of a Republican field hoping to unseat U.S. Sen. Elizabeth Warren. Other Republicans vying for the seat are Beth Lindstrom, John Kingston and Shiva Ayyadurai.
After failing to overhaul health care, the Republican-led Congress has turned its attention to the tax code, which Ways and Means Chairman Kevin Brady, a Texas Republican, said would be "the most transformational tax reform legislation since President Reagan reformed the code in 1986."
"It is permanent relief from having to navigate and rely on a maze of credits and deductions just to reclaim income that was rightfully yours in the first place," Brady said when the committee began marking up the bill Monday, according to a transcript. He said taxes would go down nearly $1,200 for a family of four making $59,000 annually, but Warren and others say giant corporations would be the biggest winners.
"It is the biggest tax giveaway to giant corporations in modern memory," Warren told PBS's NewsHour last week. She said, "They're going to raise taxes on a whole lot of people."
Asked if there is any part of the proposal she could work with, Warren said there are "bits and pieces," but she said the "$2 trillion giveaway" is a non-starter for her.
SHNS Audio: Diehl press conference
"You've got a senior senator that vowed last week to basically block any effort for tax reform that's going to help folks across America, folks in Massachusetts keep more money in their pockets," Diehl said. "It's going to actually reduce the corporate rate – one of the highest rates in the industrialized world – to allow us to have our companies grow and create more jobs – she's against all of that. And at the same time we have no voice in Washington with her vowing to basically be no part of the discussion on tax reform."
Other Republicans in the race favor lowering the nation's 35 percent corporate tax rate, and Kingston highlighted his support for preserving state and local tax deductions.
"I support lower rates across the board," Kingston says on his website. "I would support efforts to reform the payroll tax, as it impedes job creation and is disproportionately borne by lower wage workers. I oppose efforts to eliminate the deductibility of state and local taxes. I favor a lower corporate tax rate, as we must avoid incentives for companies to relocate overseas or employ elaborate tax-minimization strategies that create little genuine economic benefit."
Noting that lowering the corporate tax rate has had bipartisan support, Lindstrom criticized Warren for her "failure to offer constructive ideas or seek bipartisan compromise in the tax reform debate," in a Patch.com opinion piece Monday.
"Obviously, paying for these things is a point of contention, but I am confident that compromises are within reach," Lindstrom wrote, arguing for repealing the medical device tax – another area of bipartisan agreement in Massachusetts – and expanding the child tax credit.
Keying off a Forbes.com opinion piece criticizing Warren for suggesting that corporations should contribute more toward federal revenues, Ayyadurai wrote on his website, "Money goes where there’s a stable economy, low inflation and low taxes. Increasing taxes on those who innovate and take risks to deliver jobs will destroy our system. (According to forbes.com, Elizabeth Warren wants a corporate income tax rate of 105%. Our current 35% corporate tax is the highest in the industrialized world.)"
Gov. Charlie Baker, a Republican, has been aligned with Warren in criticizing the Republican-led effort to repeal the Affordable Care Act. The governor has "has serious concerns about the impact that eliminating the state and local tax deduction would have on Massachusetts families," and he "looks forward to Congress carefully vetting the legislation," spokesman Brendan Moss said.
Speaking with reporters on the sidewalk in front of the State House on Tuesday, Diehl suggested tax cuts could be financed by targeting "wasteful spending" and reforming other laws.
"If we can reform immigration, I think we can also save a lot of dollars that can go towards those tax savings plans," Diehl said.
Diehl was a major supporter of President Donald Trump during his campaign last year. Paul Manafort, who ran Trump's campaign in the spring and summer of 2016, was indicted in late October of this year along with business partner Rick Gates for allegedly conspiring to launder money and making false statements about their work for a pro-Russia party in Ukraine.
"A lot of the actions that he is being investigated for happened years and years before the campaign. He obviously was only involved with the campaign for a short period of time. So to me, those are unrelated to obviously anything that was going on with the president. I'm sure that the investigation when it runs its due course will have information not just about him, but also I hope that it has more information about Hillary Clinton and the actions taken by her foundation as far as her role as secretary of state with uranium interests in the United States," Diehl said.
The charges against Manafort were brought by former FBI Director Bob Mueller, who was hired last spring by Deputy Attorney General Rod Rosenstein to continue an official inquiry into Russia's meddling into last year's presidential election.
"If Mueller is really going to be honest with this investigation then I think at least half if not more of his energy should be spent looking at the efforts by Hillary Clinton to actually work with Russia on selling out United States interests," Diehl said.
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