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The latest news from every corner of the state, including policy emerging from Missouri's capitol.

Region's partisan lines drawn in debate over federal tax-cut proposals

Missouri U.S. senators Roy Blunt, left, and Claire McCaskill sharply disagree over current federal tax-cut proposals.
Gage Skidmore | Flickr
Missouri U.S. senators Roy Blunt, left, and Claire McCaskill sharply disagree over current federal tax-cut proposals.

UPDATED Thursday, Nov. 16, with U.S. House vote:

Top Missouri and Illinois officials in both parties are becoming increasingly active in the fight over proposed federal tax cuts, which now have a health care component.

Missouri’s two U.S. senators – Democrat Claire McCaskill and Republican Roy Blunt – illustrate the opposing sides. He’s for the latest version of the bill, while she’s against it.

The U.S. House version passed Thursday, with Rep. Ann Wagner of Ballwin among all six Missouri Republicans voting for it.  The state's two Democrats -- Lacy Clay of St. Louis and Emanuel Cleaver of Kansas City -- opposed the bill.

McCaskill, who sits on the Senate Finance Committee crafting that chamber’s tax-cut bill, told reporters in a conference call Wednesday that she’s increasingly disappointed in “the process and the product.’’

“This bill is becoming more and more skewed toward the wealthy,’’ she said.

Missouri U.S. senators Roy Blunt, left, and Claire McCaskill sharply disagree over current federal tax-cut proposals.
Credit Gage Skidmore | Flickr
Missouri U.S. senators Roy Blunt, left, and Claire McCaskill sharply disagree over current federal tax-cut proposals.

McCaskill also is concerned about provisions that would cut federal tax breaks for airports, university and hospital construction, and rehabbing older buildings.

Blunt, who’s a member of the Senate GOP leadership, pointed to the Tax Foundation's analysisthat shows a Missouri family of four with an annual income of $70,000 would receive a federal tax break of $2,400 a year. “Two hundred dollars a month makes a big difference,’’ Blunt said at a news conference this week in Washington, D.C. “It may just mean you have some savings to fall back on.”

But McCaskill says most of the provisions, taken together, hurt middle-income families.

As one example, she cited the federal child tax credit. She said the version unveiled in her committee would offer little or no additional financial boost to a single mother earning less than $25,000 a year. But a heftier benefit would be available for families earning more than $500,000 a year.

“I don’t get that,”  McCaskill said. “The families that are struggling, that need for the tax credit in Missouri are not families who make more than $500,000 a year.”

She then pointed to the Senate GOP’s latest actions that remove the Affordable Care Act’s individual mandate to purchase insurance, and remove $360 billion of federal money that now goes for health insurance subsidies and Medicaid, the health insurance program for low-income and disabled Americans.

Sen. Dick Durbin from Illinois, who’s the Democrats’ assistant Senate leader, blasted the latest version of the tax bill.

“Tax breaks for the wealthy, higher taxes on working Illinoisans, and now this bill will raise health insurance premiums by at least 10 percent,’’ he said. “The Republican tax plan has gone from bad to worse for working families.”

Missouri among states that could feel fiscal impact

The Senate and House versions of the tax-cut proposals share a proposed increase in the federal standard deduction. The upshot of that move is that it would reduce how much individuals and families pay in state taxes.

The Chicago Association of Realtors has estimated that the proposal to eliminate the state and local tax deductions would cost Illinois taxpayers an additional $2.9 billion a year.

In Missouri’s case, the  state’s loss could be as much as $1 billion a year out of its $9 billion general-revenue budget that covers most state spending.

Missouri state Treasurer Eric Schmitt, a Republican, said he believes state economic growth would eventually cancel out such losses.

He was flying to Washington on Wednesday to help fellow Republicans lobby for the tax-cut bill.

Without getting into the specific provisions, Schmitt said his overall aim was “a tax reform package that prioritizes middle-class families and small businesses, whose economic potential has been held back for far too long by an outdated tax code.”

Follow Jo on Twitter: @jmannies

Copyright 2017 St. Louis Public Radio

Jo Mannies has been covering Missouri politics and government for almost four decades, much of that time as a reporter and columnist at the St. Louis Post-Dispatch. She was the first woman to cover St. Louis City Hall, was the newspaper’s second woman sportswriter in its history, and spent four years in the Post-Dispatch Washington Bureau. She joined the St. Louis Beacon in 2009. She has won several local, regional and national awards, and has covered every president since Jimmy Carter. She scared fellow first-graders in the late 1950s when she showed them how close Alaska was to Russia and met Richard M. Nixon when she was in high school. She graduated from Valparaiso University in northwest Indiana, and was the daughter of a high school basketball coach. She is married and has two grown children, both lawyers. She’s a history and movie buff, cultivates a massive flower garden, and bakes banana bread regularly for her colleagues.