Tax-reform and cut fight about to hit Missouri TV screens, with first attack on McCaskill

Oct. 05--WASHINGTON -- With the U.S. House of Representatives passing a $4.1 trillion 2018 budget resolution Thursday that paves the way for a major tax-reform debate, the politics of the issue is about to come to TV sets all across Missouri.

Americans for Prosperity, the political organization founded by GOP financial backers Charles and David Koch, announced Thursday that it was launching a $4.5 million ad campaign in three states, including Missouri, where Democratic senators are running for re-election on ground won by President Donald Trump in 2016.

All three -- Sen. Claire McCaskill, D-Mo., Tammy Baldwin, D-Wis., and Joe Donnelly, D-Ind. -- are up for re-election next year and have said they would be amenable to tax reform.

"We are going to be holding these three vulnerable Democrats accountable," Americans for Prosperity President Tim Phillips said in a conference call with reporters.

Phillips also issued a warning for Republicans if they don't pass promised reforms that lower and simplify tax rates. And he acknowledged that concerns about the tax-reform structure put forth by President Donald Trump that have been raised by McCaskill and other Democrats would need to be worked out in potentially bipartisan negotiations on Capitol Hill.

The House passed the 2018 budget framework on a party-line vote Thursday morning that opens the door for major reform on a simple majority vote. All Republicans from the St. Louis area voted for it: Reps. Blaine Luetkemeyer, R-St. Elizabeth, Mo.; Ann Wagner, R-Ballwin; Jason Smith, R-Salem, Mo.; Mike Bost, R-Murphysboro, Ill.; Rodney Davis, R-Taylorville, Ill; and John Shimkus, R-Collinsville.

Rep. William Lacy Clay, D-St. Louis, voted no.

Sen. Roy Blunt, R-Mo., said last week that he hoped Congress would pass a major tax bill before the end of the year. If not, Phillips warned, there are no assurances on how and where the Koch group might go on the offensive in 2018, raising the possibility of nasty primary fights among Republican incumbents.

"It would dramatically harm Republican chances in 2018 if they failed on this front, especially coming on the heels of the health care failure. The stakes are high, no question about that," Phillips said.

The ads about to run on Missouri TV say McCaskill "is standing in the way of a simple, fair, tax system." Americans for Prosperity, in June, had also run a smaller digital ad campaign against McCaskill.

When Trump released the outline of his tax-reform plan, which reduces the number of brackets on personal income, and reduces the corporate tax rate from 35 percent to 20 percent, some Democrats immediately attacked it as a sellout to the rich.

McCaskill and a cluster of other Democrats facing potentially tough elections next year were more circumspect. She told the Post-Dispatch that some aspects of the plan, such as raising deductions for middle-income families, were attractive, and that she would entertain supporting lowering of the corporate tax rate.

But McCaskill also raised concerns about the impact of the revisions on the deficit. She said she was especially concerned about "pass-through" provisions, which could potentially allow individual incomes of wealthy Americans to be taxed, instead, at lower corporate rates.

"What I am really worried about is whether or not we are creating a loophole on this pass-through tax," McCaskill told the Post-Dispatch.

Phillips called Trump's framework "a good starting point. It is not the be-all-end-all to the standpoint that it has detailed every single provision."

He added: "I know that is a work in progress on figuring out the pass-through rate, and that is something that I hope Sen. McCaskill can be a part of finding the right solution for."

AFP has been one of the major political players on the conservative wing of the GOP, and it spent more than $13 million on federal campaigns in 2016, according to the Center for Responsive Politics.

About $1.2 million will go to TV ads in major Missouri markets, and the total $4.5 million campaign in the three states dwarfs the "sizeable six figures" amount the Democratic Congressional Campaign Committee announced it was spending attacking 12 Republican House incumbents for voting for a GOP replacement of the Affordable Care Act.

One of the targets of those ads is Bost, who faces a challenge from St. Clair County Attorney Brendan Kelly, a Democrat, in the Metro East district.

Phillips said that his group does not draw "red lines" on whether it would go after Republicans if they failed to get tax reform passed. But, he added: "It is a once in a generation opportunity -- do your job... There will be a dramatically high price if you fail."

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