A "Roll of the Dice" for the middle class
Republicans have spent months promising that their tax bill would be all about the middle class. Instead, as the New York Times points out, the bill is a giant tax cut for the wealthiest Americans and corporations—leaving the middle class behind. Highlights here:
“The House Republican tax bill is a clear windfall for corporate America and a roll of the dice for the middle-class families that President Trump promised would be the centerpiece of his economic agenda.”
“It is difficult to see those provisions as the unambiguous gift to American workers — the ‘major, major tax cut,’ in the words of Mr. Trump — that Republicans promised. Instead, the bill effectively asks those workers to put their faith in a sort of bank-shot theory of income growth, where corporate tax cuts turn into profits that are passed on to workers in the form of higher wages.”
“But the new bill goes beyond rate cuts and the standard deduction to eliminate many tax preferences, some of which benefit the poor and the middle class and also presumes spillover effects from returning money to corporations.”
“Under the current law, parents may claim personal exemptions on their tax forms for themselves, their spouses and their children. The new bill would replace those exemptions with an expanded child tax credit and a $300 personal credit for each parent. For some families, the value of the new package appears to be less than the value of the old package, so their taxes would go up. Also, the $300 credit is set to expire after five years.”
“Other workers will see tax increases by losing access to deductions they currently make heavy use of. Most notably, that includes workers with high out-of-pocket medical costs, who would no longer be able to deduct them under the Republican bill.”
“It is difficult to see those provisions as the unambiguous gift to American workers — the ‘major, major tax cut,’ in the words of Mr. Trump — that Republicans promised. Instead, the bill effectively asks those workers to put their faith in a sort of bank-shot theory of income growth, where corporate tax cuts turn into profits that are passed on to workers in the form of higher wages.”
“But the new bill goes beyond rate cuts and the standard deduction to eliminate many tax preferences, some of which benefit the poor and the middle class and also presumes spillover effects from returning money to corporations.”
“Under the current law, parents may claim personal exemptions on their tax forms for themselves, their spouses and their children. The new bill would replace those exemptions with an expanded child tax credit and a $300 personal credit for each parent. For some families, the value of the new package appears to be less than the value of the old package, so their taxes would go up. Also, the $300 credit is set to expire after five years.”
“Other workers will see tax increases by losing access to deductions they currently make heavy use of. Most notably, that includes workers with high out-of-pocket medical costs, who would no longer be able to deduct them under the Republican bill.”