Once Republican leaders filled their plan with tax cuts for the
wealthy, they didn’t have much money left for the middle class. In the
Senate, Republicans were so desperate to find money that this past
week they released a new version of the bill that made virtually all
of the middle-class tax cuts temporary. They expire before the bill’s
final year, 2027.
An assortment of middle-class tax increases — again, to help cover the
cost of the tax cuts for the wealthy — last for the full life of the
Senate bill. As a result, it ends up being a tax increase on
households making less than $75,000, according to the only rigorous
analysis so far, by the Senate’s Joint Committee on Taxation. For
families making somewhat more than $75,000, the tax cut is modest and
likely temporary, given the deficit. The plan, says Martin Sullivan,
chief economist at Tax Analysts, a highly regarded research group,
has “stunningly meager tax benefits for middle class.”
Pass it quick, before they find out!
Republicans are of course desperate to notch a legislative win before
the year ends, especially given their failed promise to repeal
But perhaps more important, Republican lawmakers need to pass this
terrible bill before voters — and indeed lawmakers themselves — have a
chance to learn what's in it.
“It’s an ostrich approach to tax policy,” says Steven Rosenthal, a
senior fellow at the nonpartisan Tax Policy Center.
Republicans don’t want to learn what their own bill will cost, for
For years, Republicans promised that their tax cuts would pay for
themselves, once you accounted for all the economic growth they’d
unleash. They even mandated that Congress’s own nonpartisan internal
scorekeepers take into account this “macroeconomic feedback” when
evaluating the budgetary effect of major bills such as this one.
But now the Senate is racing to vote before those scorekeepers have a
chance to evaluate their claim about the bill’s cost (or lack thereof,
This is surely no accident. Outside groups, including one favorable to
the tax overhaul, have already done their own analyses. So far none has
found that the bill generates enough growth to pay for itself.
There’s also that little inconvenient truth about whom the bill
Republican leaders keep claiming the bill focuses on helping the middle
class. But voters are already catching on to the fact that the biggest
tax cuts go to the wealthiest. Lately the public has learned that the
Senate bill will actually raise taxes for households making less than
$75,000 by 2027, relative to current law. Yes you read that right. And
it’s true even if you don’t count the bill’s changes to Obamacare.
The more time that passes, the angrier these voters will get, and the
more pressure they’ll presumably place on elected officials to either
change or oppose the legislation.
Which is yet another reason to vote on the bill ASAP: Familiarity will
breed (even more) contempt.
Unfortunately, rushing this bill through means that in addition to all
the deliberate goodies and giveaways to the rich, there will be lots of
unintended goodies and giveaways. That’s because, given the haste with
which this bill was drafted, the plan remains full of glitches.