Dec 7, 2017

Shimkus to be in the room when tax reform negotiations happen

When members of the U.S. House and Senate attempt to hammer out a final bill on proposed tax reform, a metro-east congressman is set to be part of the negotiations.

U.S. Rep. John Shimkus, R-Collinsville, is serving on the conference committee charged with melding together the House and Senate versions of a tax reform plan.

“In my career said I’ve always wanted tax reform, and I always wanted a fairer, flatter, simpler tax code,” Shimkus said Thursday during a conference call with reporters.

Shimkus said about 80 percent of his constituents use the standard deduction, instead of itemizing. He estimates that percentage will go to 90 percent if the standard deduction is doubled, as proposed.

“I don’t know how much more simpler you can get, if 90 percent of my people can file on a postcard,” Shimkus said, in response to claims by Democrats that the legislation would add thousands of pages to the tax code. “I think the real issue will, who’s right, who’s wrong once the bill is passed and what (are) the results?”

Among other provisions, the reform proposal calls for reducing the corporate tax rate to 20 percent from 35 percent. The House version of the reform proposal calls for going to four tax brackets from seven, including lowering the middle class tax bracket from 28 to 25 percent.

He said an official timeline hasn’t been set for the conference committee, which has yet to formally meet, but he is confident President Trump will have something to sign by Christmas.

“I think we’re moving quickly,” Shimkus said.

Among the changes proposed in the tax reform is eliminating the tax deduction for state and local taxes.

“The state of Illinois should lower their taxes,” Shimkus said. “I get it, I’m from Illinois. I’m not going to defend Illinois for being a high-taxed state, nor am I going to defend Illinois for being fiscally bankrupt. My colleagues across this country say we’ve got solvent strong states, and we shouldn’t subsidized the high-taxed states. That’s what happens when you allow that deductibility. The rest of America is subsidizing the poor fiscal stewardship of high-taxed states.”

He did say, however, there may be some changes to the proposal to allow for the deduction of state and local taxes.

“My guess is they’re going to have to address it,” Shimkus said. “They’ll probably have a cap or limitation. They may look at how do you do it. Even some of these high-tax states (like Illinois), some are because high property values, high property taxes, some are because of high sales tax, some states have taxes on durable goods. There are differences in that. They’ll probably set a ceiling on what can be deducted up to the ceiling,” he said.

“Although we have some fairly wealthy areas in southwestern Illinois … this is mostly a Chicago suburbs issue for the state of Illinois. It’s definitely not a downstate issue.”

During the conference call, Shimkus was asked about how the proposal would tax tuition waivers for college and graduate students.

“If you want a fairer, flatter, simpler tax code, do you want to cause rural small town America to pay for tax credits for people who are in larger communities, whether that’s in higher education, or in the suburbs of Chicago,” Shimkus said. “When you provide tax breaks and incentives, someone is paying for that.”

Shimkus was named by the House leadership when the Senate included a provision that would allow oil drilling in the Arctic National Wildlife Refuge. Shimkus is a member of the House Energy and Commerce Committee.

“It’s an exciting process. It’s not something I lobbied for; I was surprised when I got named,” Shimkus said.