WASHINGTON -- The Republican tax plan unveiled Thursday would mean lower taxes for most Arkansans but could also add to the national debt, members of the Arkansas congressional delegation said.
The legislation, if passed, will spark economic growth and lessen the burden on members of the middle class, they added.
Few Arkansans would be affected by provisions capping home mortgage deductions and limiting deductions for state and local property taxes. Most would benefit from higher standard deductions, an economist said.
Several lawmakers from Arkansas gave the proposal high marks.
"My preliminary review is that the plan is pro-growth, pro-savings and reduces the burden on hardworking families both in terms of rate and in making the tax system simpler and fairer," said U.S. Rep. French Hill, a Republican from Little Rock. "In my initial look, I believe this plan will help families keep more of what they earn and make American businesses more competitive and America a better place to start a business."
U.S. Rep. Steve Womack said the drafters deserve kudos for putting the proposal together.
"I'm bullish on the plan," he said, predicting it would lower taxes for most of his constituents.
Those with doubts about the bill should read it, run the numbers or talk to an accountant, and they'll see that they stand to benefit from the overhaul, he added.
The Republican from Rogers predicted the tax plan would boost the U.S. economy if it becomes law, helping to offset some of the lost revenue that critics say would sharply increase the deficit.
"I'm a true believer that when you can lower the taxes and make your businesses competitive with your global competition, that we will see job growth in this country unlike we've seen in recent memory."
U.S. Rep. Rick Crawford said the tax plan would provide a tax cut of $1,182 to a family of four with a household income of $59,000 per year.
"That really encompasses a majority of my district," the Republican from Jonesboro said.
The proposal also eliminates "a whole lot of unfair special interest tax breaks that have really stifled our economic growth," he said. "That's going to increase economic activity and improve our economic picture almost immediately."
Crawford said he hopes the bill passes in the House by Thanksgiving and the Senate before the December holiday break. "That would be a great Christmas gift," he added.
U.S. Sen. John Boozman called the legislation "the first step to providing tax relief to hardworking Arkansans."
"Americans are going to be able to keep more money in their billfold as opposed to sending it to Uncle Sam," he said.
President Donald Trump promised to overhaul the tax system if elected, Boozman said, adding, "It's right at the top of the list and he's working hard to follow through on that.
A spokesman for U.S. Sen. Tom Cotton said he was reviewing the legislation. U.S. Rep. Bruce Westerman is also studying the proposal, a spokesman said.
On Wednesday, Westerman listed three items he wanted to see in any tax overhaul.
"I hope to see lower rates and simplification, and I hope to see the removal of the death tax," the Republican from Hot Springs said.
Under the plan unveiled Thursday, estates of up to $11 million would not be taxed per person; the tax would be phased out entirely by 2024.
Democratic Party of Arkansas Chairman Michael John Gray said earlier drafts of the plan had caused concern.
"You have to give Congress credit for at least moving forward and making it a lot better than what it looked like [initially]," he said. "There's still some issues that I have with it but we're moving in the right direction."
He said the proposal could be improved by increasing tax credits for children and restoring a tax break for retired people on disability.
The law eliminates or caps some other existing tax breaks, but those changes won't affect most Arkansans, according to Michael Pakko, chief economist for the Arkansas Development Institute at the University of Arkansas at Little Rock.
"Only about 22 percent of Arkansans itemize their deductions on their tax forms," he said, a little under 275,000 of 1.2 million returns in Arkansas.
Most Arkansas tax filers would benefit from the increased standard deduction, he said. The legislation calls for nearly doubling it. The legislation also raises the child tax credit from $1,000 to $1,600, another feature that would benefit large numbers of Arkansans, he noted.
The $10,000 cap on property tax write-offs won't touch most Arkansans. "Of those who did itemize, the average on real estate taxes was $1,937 per return. Far below that $10,000 figure," Pakko said.
The cap on mortgage deductions, set at $500,000 on new home purchases, would also have little impact, he said.
"Arkansas' average mortgage debt was $123,495, which was the fourth lowest in the nation," he said, citing 2016 data from Experian, a company that tracks consumer credit.
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Metro on 11/03/2017