If elected in November, Senate candidate Jenny Wilson would file a bill to reinstate some recently reduced taxes for the richest Americans, eliminate the carried-interest deduction, and raise the corporate income tax rate to 25 percent.
The revenue from those changes could reduce the national deficit, Wilson said, or allow for larger tax cuts for lower-income earners than what Americans received under the recently enacted GOP plan.
“We are taking on $2 trillion in debt as a nation,” Wilson said of the current law. “That fundamentally comes out of our pockets in the end, either through reduced services, higher taxes down the road, or it puts us in a very tough position if we have another economic dive downward.”
The draft tax bill, released Thursday by the Salt Lake County councilwoman and Democratic Senate candidate, is intended as a “fix” to the tax code, Wilson said, rather than an attempt to repeal the work of congressional Republicans.
Wilson said she wants to focus on the areas of federal tax law that would be the least disruptive while still helping low- and middle-income Americans.
“If the Democrats take over both houses [of Congress], I would object to starting over,” she said. “The ping-pong, who’s-in-who’s-out, isn’t going to build America, in my opinion.”
In December, Republican majorities in the House and Senate passed the Tax Cuts and Jobs Act of 2017. No Democratic lawmakers supported the bill.
The changes included a consolidation and reduction of personal income tax brackets, an increase in the standard deduction and some family tax credits, the elimination of personal exemptions and a cut to the corporate income tax rate from 35 percent to 21 percent, among other provisions.
Wilson said there are elements of consensus in the GOP bill, including the need for a simplified tax code and a lower corporate rate. But the drop in corporate taxes from 35 percent to 21 percent was too far, she said, and lawmakers failed to include an elimination of carried-interest deductions, claimed by wealthy private investors, despite stated support for that change by President Donald Trump.
“By pulling [corporate taxes] back to 25 percent, we’re in line with other industrialized nations,” Wilson said.
A spokesman for Republican Mitt Romney’s Senate campaign declined to comment, but Romney has spoken favorably of the GOP tax bill in the past.
State Rep. Mike Kennedy, R-Provo, who is challenging Romney for the Republican nomination in the Senate race, stated his support for the GOP changes in a Friday statement to The Salt Lake Tribune.
“I support the recently passed tax cuts,” Kennedy said, and later added, “We should always look for ways to simplify the tax code and reduce the burden on all Americans, but we have to control spending and reduce the deficit. It’s our most significant national security risk and has been my focus since the beginning of this campaign.”
Wilson acknowledged that as a potential junior senator, she would lack the seniority to push a bill quickly through the chamber. But with the GOP plan’s cuts to personal income taxes scheduled to expire in 2025, she said, it’s likely debate of the federal tax code will continue, and it should focus on Americans with limited means.
“The income gap is real; we are concentrating wealth and leaving people behind,” Wilson said. “We will not recover as a nation if we don’t get this right.”