I am not rich but I do pay IRS taxes and I am certain that I am not alone on this. I say this because the author, Jennifer Rubin below alleges, “T]he vast majority of American taxpayers pay little to no income taxes.” However it is true that the wealthy pay most of the taxes.
The republicans’ tax bill has nothing to do with helping the middle class. If the republicans’ assertions were true, the tax bill would have been written differently to target reductions on payroll taxes — or by funding programs those income groups use. For example, they could have considered ways to help young peoples with their college loans or proving funds directly to young families to pay for quality children’s day care expenses. But a former Goldman Sachs Chairman, Gary Cohn and hedge fund manager Steven Mnuchin who helped draft this republican tax cut bill are obviously clueless about the those living in the universe of the middle class and the poor.
On October 30, 2017, Jennifer Rubin of the Washington Post penned the following report, “The danger of hawking antique tax policy.”
“If Republicans had bothered to think about it, they would have recognized that basing a tax cut on its benefits to the middle class was doomed to fail. The Post’s Glenn Kessler reminds us:”
“[T]he vast majority of American taxpayers pay little to no income taxes; they instead mostly pay payroll taxes such as Social Security and Medicare. So it really strains credulity for administration officials such as Cohn to say the wealthy will not get a tax cut. ”
“The wealthy pay most of the taxes, so unless the tax plan specifically leaves them untouched — which Trump’s plan does not — they will get big tax cuts. This is why distributional tables often look so lopsided when tax rates are reduced. The administration has suggested that another, higher rate level might be added, presumably so the distributional tables won’t look so ugly, but right now the plan calls for a significant reduction in the top rate.”
“Rather than try to defend “trickle down” tax policy, the administration and congressional leaders chose to lie about what they had produced. They claimed it was not a boost for the rich. They claimed the middle class would be the focus of the plan. They claimed the tax cuts would pay for themselves. All three claims were spectacularly false.”
“We find they would reduce federal revenue by $2.4 trillion over ten years and $3.2 trillion over the second decade (not including any dynamic feedback). In 2018, all income groups would see their average taxes fall, but some taxpayers in each group would face tax increases. Those with the very highest incomes would receive the biggest tax cuts. The tax cuts are smaller as a percentage of income in 2027, and taxpayers in the 80th to 95th income percentiles would, on average, experience a tax increase.”
“If excluding the rich and targeting tax cuts to the middle class was really their objective, Republicans did a remarkably poor job:”
“In 2018, the average tax bill for all income groups would decline. Taxpayer in the bottom 95 percent of the income distribution would see average after tax incomes increase between 0.5 and 1.2 percent. Taxpayers in the top 1 percent (incomes above $730,000) would receive about 50 percent of the total tax benefit Between 2018 and 2027. Between 2018 and 2027, the average tax cut as a share of after-tax income would fall for all income groups other than the top 1 percent. In 2027, taxpayers between the 80th and 95th percentiles of income (between about $150,000 and $300,000) would experience a slight tax increase on average.”
“How did Republicans come to put all their policy eggs — their entire program for middle class prosperity — in a plan that could not possibly deliver promised benefits?”
“It’s yet another instance in which the party faltered because it has stopped thinking about the present and future. Stuck in the past it assumes everything is as it was in 1981. They neglect to consider the debt is much bigger, income inequality is much worse and the average taxpayer doesn’t have a huge federal tax bill. Habit, intellectual laziness and the iron grip of donors and groups wedded to old mantras (that just so happen to benefit them) have deadened the party’s ability to deliver on promises and serve the country as a whole.”
“Let’s remember tax cuts aren’t at the top of voters’ priority list anyway and aren’t needed to dig us out of a recession. If Republicans nevertheless insisted on tax cuts and really wanted to help middle- and lower-income Americans, they’d give them a break on their payroll taxes — or increase benefits by funding programs those income groups use. That’s not in the GOP’s stale playbook so it isn’t even considered.”
“Perhaps Republicans will ram the tax cut monstrosity through. If they do, however, they will create a huge opening for Democrats to steal the GOP’s populist thunder, reclaim its image of the working class and run in 2018 and 2020 against tax cuts and health-care takeaways.”