Rep. Mike Coffman studying GOP tax plan despite $1.5 trillion deficit spike; Sen. Michael Bennet blasts it

“The greatest threat to the long-term stability of the United States is our rising and unsustainable national debt.” — Congressman Mike Coffman's website

WASHINGTON | Aside from controversy over who will and won’t benefit from the GOP tax-reform plan many Republicans in Congress are supporting a proposal that substantially increases the nation’s debt, despite often citing the deficit as a reason for opposing Obama-era policies.

Aurora GOP Congressman Mike Coffman told KOA News Radio Friday morning he’s still studying the legislation, but believes it helps middle class Americans.

“I think it’s important to simplify the code, and go to a competitive rate internationally.” he said. “It helps middle class families in terms of lowering their rate.”

The plan would add at least $1.5 trillion to the national deficit over the next decade, official estimates show. While the effort is seen as Republicans abandoning a previous hard-line on fiscal discipline, it could score the GOP a political win ahead of next year’s midterm elections, pundits say. It’s also unclear how the bill would affect the net federal tax bill of a wide swath of middle income Americans, and especially those from state’s like Colorado that have state income taxes.

Coffman’s office hasn’t returned a request for comment regarding the plan’s relevance to the national debt.

The national debt has long been one of Coffman’s top priorities during previous campaigns, including the last one. Coffman says on his congressional webpage: “The greatest threat to the long-term stability of the United States is our rising and unsustainable national debt.” In 2014, the congressman supported what was dubbed the “Koch budget”, because it wiped out deficit spending over a decade.

In the proposed House tax reform plan, some middle-income families would pay less in taxes, thanks to doubling of the standard deduction and an increase in the child tax credit. But those who have mortgages and tax that or other tax deductions would not fare as well, and possibly pay more, according to some independent tax analyses of the bill.

There is no disagreement that the bill would substantially aid the nation’s wealthiest citizens and businesses.

Colorado Democratic Sen. Michael Bennet blasted the measure, saying it’s design to go around the bi-partisan legislative process was the least of its problems.

“Coloradans don’t have to look far to imagine the results of this misguided tax plan,” Bennet said in a statement. “In Kansas, after passing tax cuts for the wealthy that aren’t paid for, the economy stagnated, job creation lagged, and services were slashed.  At the same time, right next door in my home state of Colorado, we brought unemployment down to the second-lowest rate in the country and growth boomed. If states are laboratories of democracy, the Kansas experiment was a five-alarm lab fire. We must not repeat this failed experiment across the entire country.”

Colorado GOP Sen. Cory Gardner has not issued a statement on the tax plan.

Last week, legislative aides for Coffman said they were hopeful the plan would include increasing the standard deduction, especially amidst rumors the plan would eliminate state and local tax deductions — which are widespread across Coffman’s district, with 42 percent of tax units using the deduction, according to the Government Finance Officers Association.

Colorado Fiscal Institute tax expert Ali Mickelson, like Coffman’s office, speculates that so many people in the district get those deductions because they’re homeowners, and thus itemizing leads to a bigger deduction than the current standard deduction. It’s unclear right now how many of that category of taxpayers in Coffman’s district would see a net tax benefit. The current bill allows some property tax deduction but disallows medical and some other deductions.

Coffman’s aides said fewer people would likely claim state and local tax deductions with the doubling of the standard deduction, and Mickelson said that could very well be the case.

If passed, the GOP plan would limit the deductibility of local property taxes to $10,000 and eliminate the deduction for state income taxes, which has generated significant opposition from Republicans in high-tax states such as New York and New Jersey. Those states, like Colorado, also fund a large portion of state services with income taxes, which would not longer be deductible, under the current plan.

GOP tax plan may offer little aid for many in middle class

A group of 20 Republican lawmakers from those states opposed the $4 trillion budget last week, creating a way to move the tax plan forward without standard congressional debate, but Coffman said in a statement he was “honored to have joined (his) colleagues in the House in passing the Senate’s budget, paving the way for tax reform.”

Locally, Mickelson said there may not be a huge effect on Coloradans on tax deduction front because Colorado isn’t a high tax state, rather somewhere middle of the pack.

But the state will have to heavily assess the impact of a bigger national debt because it could result in cuts to federal programs — which would mean states would have to pick up the tab.

“One thing that is unique to Colorado is how we can respond to tax changes,” Mickelson said. “We can’t just increase local taxes because of TABOR, which ends up being more challenging.”  Coffman’s Democratic opponents so far aren’t keen on the plan.

In a statement, Jason Crow said the plan would make it harder for middle-class Americans to buy a home and pay off student loan debt.

“I grew up in a working class family that faced the same hardships that many Coloradans face today,” he said. “Mike Coffman and Paul Ryan shouldn’t be pulling the rug out from under them to give tax breaks to the wealthy and corporations.”

Likewise, David Aarestad called Coffman’s support of the budget part of the “Washington problem.”

“Washington is broken and has slammed the middle class with a skyrocketing deficit and tax breaks for billionaires,” he said. “At the same time, the most vulnerable are put at risk with sabotage to Medicare and Medicaid. Many Republicans opposed this early Christmas present to the richest in the country, but Mike Coffman has forgotten his roots back here at home.”

Levi Tillemann didn’t respond to a request for comment 

The Associated Press contributed to this story.