Reactions to the newly-unveiled House Republican tax reform plan are mixed. Local Republican representatives hail it as helpful to working families. But one local Democrat says it's deceiving to working Americans and harmful to local economic development.
Republicans say their House tax reform bill will strengthen the middle class by offering an increased Child Tax Credit ($1,600) and by doubling the standard deduction. It also makes no changes to the 401k retirement system.
“Passing comprehensive tax reform will be one of the most important accomplishments we will see under President Trump,” said Congressman Chris Collins in a prepared written statement. "Making America more competitive on the world stage will truly make America great again and allow more Americans to achieve the American dream. Our nation is struggling and we need to fix the broken, outdated tax system that has burdened hard-working individuals and has crushed our economy."
WBFO requested an interview with Collins but as of late Thursday we were not contacted by the Congressman.
Fellow Republican Tom Reed, who sits on the House Ways and Means Committee, says his constituents will realize a tax cut of more than $1,600.
"When people get to keep more of their hard earned dollars, it means money for things that make a difference for hardworking people," said Reed in a prepared written statement. "It’s a down payment on a car for a factory worker in Hornell, daycare for a young family in Elmira, or a trip to Disney World for a family in Dunkirk. Seniors can now visit their grandkids who were forced out of New York because the taxes were ‘too damn high.’ This is important to folks throughout the Southern Tier, Finger Lakes, and Western New York. That’s who I’m working for and whose voice I will continue to carry to Washington." Reed added.
Democratic Congressman Brian Higgins, meanwhile, calls the plan a "fraud" and said what Republicans aren't telling constituents is that the nation's wealthiest - the so-called "one percent" - are the biggest winners. Their income tax rate holds at 39.6 percent.
"If you make $730,000 a year or more, you will see an increase next year in your income of about eight and a half percent," Higgins said in a telephone interview with WBFO. "If you make $150,000 or less, your income will increase by about one percent. Three million very wealthy Americans will get a $200,000 annual tax cut and 250 million not-so-rich Americans will get a $220-a-year tax cut."
The nation's poorest will actually see a two percent tax increase under the GOP plan, which adjusts their rate from 10 percent up to 12 percent.
The GOP plan caps state and local tax deductions at 10-thousand dollars. Critics say while taxpayers may save some, it will still amount to more taxes for owners of more expensive homes.
Higgins points out that the Republican bill also eliminates several tax credits that have been essential to the Buffalo area's economic renaissance. He identified the historic tax credit and solar investment tax credit as two of the most important. He estimates around 70 projects in the Buffalo-Niagara area were made possible through the availability of the historic tax credit, which provides incentives to redevelop buildings deemed "historic" by the federal government.
Losing the solar tax credit, he warns, could deal a serious blow to Buffalo's Tesla plant just as it's beginning production.
"This is a plan that will particularly hurt Buffalo and Western New York," Higgins said.