Republicans and the Trump administration have been pushing tax reform for quite some time now, and they are currently trying to force legislation through Congress to do exactly that.
They say it will lower taxes for most Americans, but what it will actually do is decrease taxes mainly for the super rich, while giving poorer Americans a larger tax footprint.
Here’s an analysis of the plan from the New York Times:
Nearly half of all middle-class families would pay more in taxes in 2026 than they would under current rules if the proposed House tax bill became law, and about one-third would pay more in 2018, according to a New York Times analysis, a striking finding for a bill promoted as a middle-class tax cut.
President Trump and congressional Republicans have pitched the plan unveiled last week as a tax cut for most Americans. But millions of middle-class families — particularly those with children — would see an immediate tax increase, averaging about $2,000. Among the hardest-hit under the plan would be some of the most vulnerable taxpayers: those with huge out-of-pocket medical expenses.
By 2026, 45 percent of middle-class families would pay more than what they would under the existing tax system.
The main argument coming from Republicans? Corporate tax cuts will be good for business, and in turn, businesses will have major economic growth, which in turn leads to more jobs, higher wages, etc. But, that approach is the same one tried under previous Republican administrations. And, we all know how that has turned out.
It’s unreliable at best. In the meantime, all we know is millions of households will be affected.
The Joint Committee on Taxation even admits that the majority of tax cuts go to the top. Millionaires stand to gain 16 times what those in the bottom half of the income distribution will receive. And, 45 percent of the cost of providing the tax cuts will go to those making more than $500,000 a year (fewer than 1 percent of files.
So far, Republicans have failed to show how they will pay for the cuts, and almost every economist with any reputation has already confirmed that in order for the bill to add to governmental revenues or balance the budget, economic output would have to grow around 4% per year. That hasn’t happened in decades. What makes the GOP think it’s accomplishable now? In one simple phrase: It won’t.