Good Question

Remember Republicans’ *big plan* on tax reform? It turns out it is another tax cut for the rich. Washington Post’s Wonkblog asks the question on everyone’s mind: “What about the middle class?”

According to Wonkblog’s analysis, the GOP plan will mean “benefits go to the wealthy” and “it won’t even do much to boost economic growth.” The full analysis can be found here, but here are some key excerpts:

“The top rate for the wealthiest Americans — the rate on any income above $418,000 a year — will fall from 39.6 percent to 35 percent, according to a report from Axios confirmed by The Washington Post. That alone could kill any Democratic support for the bill. It could also hurt Trump. He campaigned as a populist who would fight for the little guy, a message he has continued to push in the White House.”

“The bottom line is the plan isn't sounding very populist. Republican leaders insist there's more to come.”

“Without major changes, this deal is looking more and more like traditional ‘supply side economics,’ the theory that tax cuts for the top help everyone else, because the wealthy supposedly turn around and spend and invest more. After decades of stagnating wages (especially for men) and rising inequality, Americans are growing skeptical of this approach.”

“Regardless of how low the rate goes, big businesses are going to be thrilled.”

“So what about the middle class? The wins for the rich and big business are already pretty clear. The picture for the middle class and small business owners is a lot murkier.”

“If Trump and GOP lawmakers really wanted to help working people, they would need to do more than simply lower the rates. More than 45 percent of Americans, including many working poor, won't benefit from rate cuts because they don't earn enough money to owe any federal income taxes.”

“Much could change before Trump takes the podium on Wednesday, but so far, this does not look like a win for the middle class, especially the lower middle class.”