A Regressive Tax Bill Which gets Much More Regressive Over Time
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Now let’s get to it:
As I noted in a post yesterday, the trouble with much of the MSM coverage of the fake tax reform bill is that it focuses just on the impact of 2018-2019 which is exactly how the GOP wants it.
Like the Washington Post:
“The House and Senate are expected to pass the final version of the tax bill this week, and most Americans are expected to see an immediate tax cut in 2018.”
Polls show that most Americans expect their taxes to go up under the bill. The GOP has seized on MSM analysis like the above to argue that voters have been duped by Dem propaganda.
But this is a case where most Americans are right. But the key is time. You have to follow the effects of this tax bill over time. The big things to remember are:
1. The terribly regressive impact of the elimination of state and local tax deductions. This is calculated to force the blue state governments to cut public services as it will hurt tax collections. One totally upside down argument you hear from GOPers is that somehow the blue states are cheating by having high state taxes. But in truth the blue states pay the federal government more than we receive.
2. Most of the individual cuts-like the rise in the standard deduction-are phased out after 2025 while the corporate tax cuts are permanent.
3. The end of the ACA mandate.
Once the effects of this are felt most nonrich people will see a tax hike by 2027.
JCT has a study:
“The final tax bill that the House and Senate will vote on this week provides by far the largest benefits to high-income people, and many middle- and lower-income households would end up worse off, new Joint Committee on Taxation (JCT) estimates show. Under the amended bill, in 2025 (when most of its provisions would be in place), high-income households would get the largest tax cuts as a share of after-tax income, on average, while households with incomes below $30,000 would on average face a tax increase. By 2027, when many of its provisions would have expired, those at the top would still get large tax cuts, but every income group below $75,000 would face tax increases, on average. Yet despite raising taxes on millions of middle- and lower-income households, the bill would add $1.5 trillion to deficits over the decade due to its large tax cuts for high-income households and corporations.”
By 2027 most taxpayers will see a tax hike. Greg Sargent has some good charts:
— Greg Sargent (@ThePlumLineGS) December 20, 2017
I've created new charts that show just what an enormous giveaway to the rich the Trump GOP tax plan really is.
They use Tax Policy Center data.
— Greg Sargent (@ThePlumLineGS) December 19, 2017
Meanwhile, the bill is a disaster for those who make less than $30,000 and true to form, gets worse over time:
“Households with incomes below $30,000 would face tax increases, on average, for two main reasons. First, most of the bill’s changes to the individual income tax would largely end up being a wash for this income group, on average. (For example, raising the standard deduction would lower households’ tax liability, while repealing personal exemptions would raise it.) And the bill’s Child Tax Credit expansion would give only token help to millions of low- and moderate-income working families (while doing far more for higher-income families).”
“Second, repealing the individual mandate would hurt low- and moderate-income people overall, leaving millions more uninsured and raising premiums for millions more, and creating uncertainty across the health insurance market. The JCT tables do not fully incorporate these harms; in particular, they do not account for increases in individual market premiums, which would affect millions of middle-income consumers, or for the decline in Medicaid coverage stemming from repeal. (Awareness of the mandate is what leads some people to explore their coverage options and learn that they are eligible for Medicaid.) The JCT tables do, however, include the reductions in premium tax credits that would occur because fewer low- and moderate-income people would sign up for marketplace coverage.”
So the more well off you are the better you do and the less well off you are the worst you do over time.
P.S. I’m Mike Sax, I’m running for Congress in the NY 2nd District and I’m a Hillary Clinton Democrat.
Meeting her recently was one of the biggest honors in my life to stand next to such a fine public servant and trailblazer. She seemed to like our Impeachment Train campaign t shirts too!
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