We’re not idiots: GOP tax plan will produce extra federal tax revenue, Rep. Amodei says
By Ray Hagar, Nevada Newsmakers
Nevada’s 2nd U.S. House Rep. Mark Amodei said on Nevada Newsmakers this week that the Republican overhaul of the U.S. tax plan will produce new tax revenue for the federal government.
Democrats, including Nevada’s 1st U.S. House Rep. Dina Titus, disagree. Titus said she fears the tax overhaul approved by a GOP-dominated Congress will “cost $2.2 trillion,” increase the “national deficit by at least a $1 trillion” and target the “social safety net that serves at-risk communities,” including cuts to Medicaid and Medicare.
Yet Amodei, R-Carson City, sees the tax plan as a revenue producer because it will energize private-sector spending.
“So if you think this (GOP tax bill) is something that will cause no change in the private sector, then we’re all idiots,” Amodei said. “I, however, don’t believe that. I think there is quite a bit of economic evidence that suggests that we should expect something along those lines (of increased federal tax revenue).”
He also feels Democrats are wrong to think the “trickle-down” economics of the bill won’t lead to increased tax revenue.
“When you put significant amounts of new cash flow into the private sector, people and corporations spend that on everything from advertising, to equipment to more employees to you-name-it,” he said. “And that creates … more tax transactions which increase tax revenue.”
Titus, D-Las Vegas, isn’t buying Amodei’s logic, saying, “The GOP, to paraphrase Clint Eastwood, is pissing on our boots and calling it rain.”
Amodei shot back: “I love her colorful language because as you know, I used it occasionally.”
Yet he discounted Titus’ concerns.
“I’ve never been a big fan of drama predictions for a decade down the road when there are a lot of moving parts involved,” Amodei said.
The economic health of the first year of the Trump Administration has already increased federal tax revenues, Amodei said.
“It’s growing at 4 percent,” he said of the economy. “Employment is going up. And guess what? That is going to bring in more tax revenue.”
Titus and other Democrat are concerned the “Pay As You Go” (or Paygo) rule of Congress would require future cuts to Medicare and Medicaid because the GOP tax bill reduces revenues without offsetting those losses in other areas.
The GOP tax cut plan would add $1.5 trillion to the debt over the next 10 years, according to national analysis. Under Paygo rules, the government would have to make $150 billion in mandatory spending cuts every year for the next 10 years to make up for loss tax revenue, according to the Washington Post.
Amodei doesn’t think “Paygo” will be a factor.
“I have already indicated that the Medicare drama would not require that Congress would actually use ‘Paygo,’ which has never been used before. There are commonly waivers for doing that, so there you go,” he said.
Amodei, however, sees a major flaw in the legislation. Tax cuts for the middle class in the bill must be made permanent, he said.
Current congressional budget rules limited Republicans’ ability to make changes that extend more than 10 years.
As a result, most personal tax provisions in the bill expire by 2026.
“Listen, we need to go and make this permanent,” Amodei said.
Amodei wants to avoid a future Congressional showdown on the personal tax provisions.
“The challenge, as you know, even from the Nevada Legislature, is don’t give them another four years (to do nothing),” said Amodei, a former assemblyman and state senator in Nevada.
“People want predictability and stability,” he said. “So don’t set up another showdown and gun fight another 48 months down the road, which by the way, appears to be the way of doing business.”
Amodei hopes Congress can make the cuts permanent before the 2018 election.
“That is one of the follow-up things that I would hope we would handle here next year, not kick it down the road to the 116th Congress,” Amodei said.
Amodei said the nation faced a similar dilemma in the “Bush-era” tax cuts and although the issue went to the “fiscal cliff,” it was resolved, Amodei said.