Most Indiana lawmakers expected to vote for tax overhaul bill Thursday

WASHINGTON — Most of Indiana’s federal lawmakers back a bill the House is scheduled to vote on Thursday to rewrite the tax code, delivering lower tax bills to many businesses and households while adding $1.5 trillion to the federal deficit over the next decade.

Polls have shown modest public support for the proposal that Republicans argue would boost the economy.

But it’s backed by some important GOP constituencies, including the U.S. Chamber of Commerce, and conservative groups like American for Prosperity, the grassroots arm of the political network controlled by billionaires Charles and David Koch.

And Republicans, who control the White House and Congress, are eager to show they can give President Donald Trump a major legislative victory before the end of the year.

“We are keeping our promises to the American people,” Rep. Todd Rokita, R-Brownsburg, said Tuesday.

While an advocate for lower taxes, Rokita has also — in his words — been “hawking on deficits” during his nearly seven years in Congress.

“We cannot continue to spend recklessly and jeopardize the American dream for our children and grandchildren,” Rokita said in September when he voted against raising the legal limit on how much the government can borrow to pay its bills.

Rep. Luke Messer, who likewise joined most Indiana Republicans in voting against raising the debt ceiling, said the nation can’t keep piling up debt.

“Hoosiers know our nation can’t keep spending money we don’t have,” the Shelbyville Republican said.

Both lawmakers, as well as Reps. Jackie Walorski, R-Jimtown, and Jim Banks, R-Columbia City, also voted last month against $36.5 billion in hurricane and wildfire relief efforts that was not offset with spending cuts.

“I believe we must take our $20 trillion national debt seriously and make efforts to pay for disaster relief,” Banks said at the time.

But lawmakers said Wednesday that the tax bill would help the economy.

“The best way to pay down our nation’s deficit is to grow the economy at a rate of 4 percent or better,” Messer said in a statement Wednesday. “Our tax cut plan can do that.”

Asked about the impact on the deficit, Rokita said in a statement he wants to “reform spending because it’s literally impossible to tax people enough to erase the debt we have now.”

► Poll: Hoosiers bothered by sense that corporations, wealthy don't pay fair share of taxes

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The nonpartisan Committee for a Responsible Federal Budget, says economic growth won’t pay for more than a fraction of the cost of the bill, and the resulting extra debt could even slow growth over time.

To grow the economy by 4 percent — double what congressional economists are forecasting for most of the decade — would require tripling productivity growth, quadrupling capital investment, or reaching an unprecedented level of labor force growth, according to the budget watchdog group.

“It is frightening that so many members of Congress are willing to believe in fantasy economics based in no historical or mathematical reality,” said Maya MacGuineas, the group’s president.

Most of Indiana’s seven GOP House members have praised the bill. The exception is Rep. Trey Hollingsworth, R-Jeffersonville, who hasn’t said how he will vote.

Indiana’s two House Democrats — Rep. Pete Visclosky, D-Merrillville and Rep. Andrew Carson, D-Indianapolis — are expected to vote against it. Carson said the bill will “ultimately be paid for by low and middle-income families through brutal cuts to programs people rely on.”

(The influential AARP came out against the House bill Wednesday, saying in part that it would hurt the ability to fund critical programs like Medicare and Medicaid.)

Indiana’s other Democrat — Sen. Joe Donnelly — has been under pressure from the White House and outside groups to back the tax bill.

The Senate bill, which is still being worked on in committee, is not expected to come to the floor until after Thanksgiving.

One of the big differences between the versions is the Senate plan would also eliminate the Affordable Care Act’s requirement that most people have health insurance or pay a penalty. That would save the federal government hundreds of billions of dollars in insurance subsidies and Medicaid costs for lower-income Americans, money that would be redirected to help pay for tax cuts. Repealing the mandate would also increase the number of Americans without health insurance and increase the cost of health insurance for those who aren’t covered through an employer or a government plan like Medicare or Medicaid, according to the Congressional Budget Office.

Donnelly opposed GOP bills to repeal the Affordable Care Act, and opposes repealing the mandate through the tax bill.

"I believe there is still an opportunity to reform our tax code, and I urge my Republican colleagues to abandon efforts to undermine our health care system and instead work in good-faith and a bipartisan manner," Donnelly said in a statement.

Rokita and Messer, two of the Republicans vying for the GOP nomination to challenge Donnelly’s re-election next year, back repealing the individual mandate.

“The individual mandate is crushing middle-class Hoosiers,” Messer said when President Trump this month tweeted that it would be great to repeal the requirement and use the savings for the tax bill.

Although Republicans are pitching the bill as a middle class tax bill, most Americans don’t share that view, according to a national poll released Wednesday.

Nearly six in ten surveyed by Quinnipiac University said the GOP tax plan favors the rich at the expense of the middle class.

The bulk of the bill’s cost is business tax cuts, including cutting the corporate tax rate from 35 percent to 20 percent, and repealing a tax on wealthy estates.

Most households would get a tax cut of more than $100 in 2019, according to the nonpartisan Joint Committee on Taxation. But by 2027, the share of households getting at least a $100 benefit would drop. And some would pay at least $100 more in federal income tax than under current law.

Hoosiers' top frustration with the tax system is the feeling that some corporations don't pay their fair share, according to an Old National Bank/Ball State University 2017 Hoosier Survey released last week.

A majority of Hoosiers also don't think some wealthy people are paying enough.

Only 30 percent said they have big concerns about the amount of taxes they themselves pay.

Contact Maureen Grope at mgroppe@gannett.com. Follow her on Twitter: @mgroppe.