State Treasurer Eric Schmitt said Wednesday both tax reform plans being debated by Congress would create at least 18,000 jobs over 10 years and stimulate economic growth across Missouri.
Schmitt plans to meet today with White House officials in Washington, D.C. He said he believes middle-class families will benefit from both tax plans, and the plans will lead to more jobs and take-home pay for Missourians.
"The effect of such reform would be enormously positive," Schmitt said at a news conference. "The proposals are forward steps toward the ultimate steps toward overhauling our tax code."
Schmitt cited an analysis by the conservative-leaning Tax Foundation, which found the House plan would create 19,166 jobs in Missouri and the Senate plan would create 18,183 jobs in Missouri over 10 years. Both plans would increase wages for middle-class Missourians by $2,421, the foundation said.
The House Tax Cuts and Jobs Act would cut the corporate tax rate from 35 percent to 20 percent. It also would reduce personal income tax brackets from seven to four and lower the income ranges affected by each rate. Both bills double the standard deduction.
The Senate Finance Committee said in a news release most families of four will see an income tax break of about $1,500 under the Senate's tax plan.
Schmitt said the cut to the corporate tax rate will spur investment in Missouri.
"Lowering the corporate tax rate from 35 to 20 percent is a big deal," Schmitt said. "Look, the last 10 years we didn't see 3 percent growth. The idea here is for an economic expansion that we saw when JFK did this and Ronald Reagan did this."
The nonpartisan Congressional Budget Office estimated the House tax plan would add $1.7 trillion to the federal budget deficit over 10 years. The CBO said Monday it did not have time to do a full analysis before a planned vote by the House today. The Senate plans to vote on its tax reform bill the week after Thanksgiving.
Congressional Republicans want to finish tax reform efforts before the Christmas recess begins Dec. 15.
"I hope they get it done by the end of the year," Schmitt said. "It is ambitious, but people have waited a long time for this. It's been 30-plus years."
The House plan would allow unborn children to be named as a beneficiary when tax-advantaged accounts, called 529 accounts, are opened. The accounts help people save for future college expenses.
Under Missouri's MOST plan, parents cannot open a 529 account for an unborn child. There are no tax penalties for changing the beneficiary to another family member, though, according to the IRS.
Under the House plan, parents would be allowed to use up to $10,000 per year in savings for private elementary and secondary school expenses. But it would end a savings account program which allows parents to save for K-12 expenses.
Schmitt expressed support for the measure, saying he supports the provisions.
"These changes would make the programs stronger than ever before," Schmitt said.
Small Business Administrator Linda McMahon and Secretary of Agriculture Sonny Perdue might also be at today's meeting, he said.
His campaign, Schmitt For Missouri, will pay for the trip. Schmitt traveled to Washington in January for a meeting of the National Association of State Treasurers. While exploring a run for U.S. Senate in July, Schmitt also traveled to Washington to meet with the National Republican Senatorial Committee.