Putting the lie to Republican claims that their tax reform would provide an on-going middle-class tax cut, a new report by a non-partisan Congressional committee shows that while there would be a very small decrease in the first years for some, by 2027 anyone making under $75,000 a year will see a tax increase of over 25 percent.
The new analysis is by the Joint Committee on Taxation, whose professional staff works with both the House and Senate to provide analysis of all tax legislation being considered by Congress, with changes provided each time the bill is modified.
The House of Representatives passed its version of the tax bill today with most Republicans in favor and a few Republicans and all Democrats opposed, which means there will be a vigorous discussion its real impact on taxpayers as it heads to the Senate.
“President Trump and Republican lawmakers have been heralding their bill as a win for hard-working Americans,” reports The Washington Post, “but the JCT report casts doubt on that claim.”
The bill written by Republicans is full of misleading and tricky twists. For instance, the generous tax cuts for big corporations are permanent, while the tax changes for most American taxpayers expire in 2025, leading to increased taxes for the middle class.
As a result, adds The Washington Post, “tax hikes for households earning $10,000 to $30,000 would start in 2021 and grow sharply from there.”
Lower tax burden for whom? Joint Committee on Taxation says there will be a tax INCREASE on everyone making below 75k. Average person in our district has 55k yearly salary. You just voted to raise taxes on the majority of your constituents. pic.twitter.com/8tYxEDCEgB
— Tyler Shotwell (@tyshotwell78) November 16, 2017
Tax brackets are currently changed with inflation, but the Republican bill changes the formula in a way that will see the middle-class pay ever higher taxes.
“By the year 20217,” continues The Post, “most Americans earning $75,000 a year or less would be forced to pay more taxes, while people earning over $100,000 a year contn9ue to get substantial tax cuts.”
In other words, the rich get bigger and more lasting tax benefits while the working class and middle class get squeezed and end up paying more taxes so those big multinational companies can pay less in taxes.
Digging into their bag of nasty tricks, the Republicans can say that the JCT analysis is incorrect because it is based on a change in the health care law that was recently inserted into the tax reform bill.
In an effort to destroy Obamacare even more than it already has, the Republicans are using the tax bill to repeal the requirement that all Americans buy health insurance, which the Congressional Budget Office has predicted there will be 13 million more uninsured Americans.
Those with low incomes who get health insurance under Obamacare have seen the cost subsidized by the government, which made it more affordable.
Under the Republican bill, health insurance premiums are expected to rise steadily, prompting millions to forgo the insurance, said Thomas Barthold, head of JCT.
“What is happening now is just shameful,” said Senator Ron Wyden (D-Ore) after he saw the information from the JCT. “I don’t know how anybody can go home and explain why it’s a good idea to hike taxes on parents who barely stay afloat to pay for a massive corporate handout.”
“Middle-income families,” said Senator Ben Cardin *D-Md.), “will actually see their taxes go up, not down.”
Tax law has always been complicated but for the most part, it was written to give middle-class families and small businesses enough tax breaks and deductions to help them balance their books.
Under the Republican plan, most of those tax breaks and deductions have been squeezed down or eliminated completely, while big companies and the rich get even richer.
Like everything Trump does and says, the Republican tax “reform” is built on a bed of lies and is filled with tricks to ensure that money flows to their rich friends and backers.
I just voted NO on the Republican tax plan. Here's why: pic.twitter.com/qdSquznUYK
— Adam Schiff (@RepAdamSchiff) November 16, 2017
A key component of the Republican plan is that the tax breaks to the rich will result in more jobs and more revenue for the government – the trickle-down theory – which has been disproven by economists and in the real world again and again.
This is just a giveaway to the rich that screws the middle class and makes health insurance for those who need it the most far less affordable while raising the cost of their taxes in years to come.
The middle class also suffers in 2027 because the Republican plan is structured in a way that causes more and more Americans to pay higher tax rates as time goes on. At the moment, tax brackets are based on income and those brackets rise a bit by inflation every year. But the GOP wants to change that to a slower inflation measure, meaning more people will fall into higher brackets each year.
This tax plan hurts middle class families to give tax cuts to the wealthy and big corporations—and the Senate version is even worse.
Sound the alarm. It's time to speak out. https://t.co/NTSQjCAHOM
— Kirsten Gillibrand (@SenGillibrand) November 16, 2017