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Here’s what Sen. Dan Sullivan is pushing for in Republican’s planned tax overhaul

  • Author: Erica Martinson
  • Updated: October 29, 2017
  • Published October 29, 2017

WASHINGTON — Alaska Sen. Dan Sullivan is hoping for major cuts to corporate taxes and adjustments to a range of personal tax deductions as Republicans ramp up negotiations for the first major overhaul of the nation's tax code in three decades.

Sullivan, a Republican, is hopeful that his party will be able to get a major bill passed this year, he said in an interview this week wherein he detailed just what kinds of tax changes he thinks will jump-start the economy.

Sullivan said he's been holding meetings with Alaskans, most recently on a swing through Southeast Alaska, as well as phone meetings from his office in Washington, D.C. Therein, he pitches the party's tax "framework" — there is no bill yet — and asks for feedback.

"I think the vast vast majority of people I've met with… (want) simplification and more competitiveness for American companies so they can produce more jobs here, which is the overall goal," Sullivan said.

Sullivan is on board with the central goal of his party's tax reform effort: cutting the corporate tax rate, which is currently 35 percent.

And he wants to simplify things for personal income taxes. "So right now they're trying to go from seven to three (tax) brackets. And just making it so Americans and Alaskans don't spend billions and billions of dollars preparing their taxes," Sullivan said.

Currently, party leaders are considering a move that would double the standard deduction for many filers, but also greatly reduce deductions and write-offs.

The central means of doing that — to make up for the loss of federal revenue from corporate tax cuts — remains controversial even within the party: eliminating state and local tax deductions, often referred to as "SALT."

Sullivan said he's all for it.

"I think it's good policy…to remove that deduction," he said. "As you know, there are certain states that benefit enormously from that. We're not one of them." Republicans estimate that eliminating the deduction could bring an additional $1.3 trillion dollars into the treasury.

But it has brought on opposition from Republicans who hail from states with high income taxes, like New York, New Jersey and California. Worry about removing a deduction that is key for many levels of earners kept 20 House Republicans for voting for even a basic budget resolution on Thursday.

Sullivan said he thinks that it's possible to tweak the requirements so that middle class families in those states don't see a tax increase. "I don't think that's good policy if you're in the middle class and the end result, even from the loss of that deduction is that you're paying more taxes," he said.

For the SALT provisions and others, Sullivan said it is better to think of changes as on a "dial," rather than all or nothing.

Along those lines, he said he would favor moderate changes to the estate tax. Often called a "death tax," the estate tax doesn't kick in until a person is passing on a minimum of $5.5 million — double that for a couple.

Doubling the baseline, to $20 million, Sullivan said, would protect more people who want to pass on businesses and farms to their children.

Sullivan said he is not interested in any moves that would make substantial cuts to tax-exempt savings programs, like 401(k)s, mortgage deductions and 529 college savings accounts.

President Donald Trump tweeted earlier in the week that changes to 401(k) deductions ($18,000 a year) are off the table, but Senate tax writers contradicted that assertion.

"These are programs that I think there's a lot of interest in preserving because they're good policy," Sullivan said.

Sullivan said he is also okay with projections that the tax framework would leave a $1.5 trillion deficit in federal tax revenues, because he believes cutting corporate rates will promote enough economic growth to make up for that.

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