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发帖数: 897 | 1 This week, House Republicans finally unveiled their tax cut package after
months of stating vague principles, squabbling over details, and even
delaying its release by a day. Even though the plan offered more information
than Republicans had been willing to cough up previously, many families
still likely have very little idea of whether they’ll be helped or hurt by
the plan. That is, unless they’re rich.
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Even without a full expert markup, it’s clear that low-income families get
basically no relief at all in what Republicans propose. The rich, though,
can rest assured that their tax bills would shrink if this grab bag were to
become law.
Before the legislation was unveiled, Republicans and their critics had been
trading volleys about whether their plan would keep the current system’s
basic progressivity: levying more taxes on the wealthy, and offering more
relief to those further down the income ladder. President Donald Trump
promised that his tax plan wouldn’t help the rich “at all,” although
Treasury Secretary Steve Mnuchin admitted that Republicans were finding it
hard to not cut taxes for the well-off.
Much of the GOP’s potential defense rested on how much they would expand
the Child Tax Credit. The current credit, which is claimed by low- and
middle-income parents, is worth up to $1,000 per child. But families who
make less than $3,000 a year can’t claim it at all, and those who do earn
above that cutoff don’t always get the full amount. Instead, families who
make less than $16,330 get just a partial credit. All of this makes the CTC
ripe for expansion and reform, an idea with support from people in both
parties.
But House Republicans want to increase the value of the credit to $1,600,
far less than what their colleagues in the Senate, Marco Rubio and Mike Lee,
have called for. Worse, the extra $600 is nonrefundable at first. Families
who don’t owe federal income taxes because they make so little can’t get
anything out of a nonrefundable credit, since it only counts to lower an
existing tax bill. About 35 percent of taxpayers find themselves in this
situation, so they’d have to wait until the extra money is gradually made
fully refundable to get anything from it. That could be 21 years from now.
Meanwhile, families earning less than $3,000 a year would still be shut out.
The plan also changes eligibility for the tax credit by requiring parents to
have a Social Security number, not just a taxpayer ID, which would hurt
many immigrants. The Center on Budget and Policy Priorities predicts that
this would make about three million children newly ineligible, 80 percent of
whom were born here.
House Republicans offered up a new $300 credit per each parent in a family,
as well as for any dependents who aren’t children such as aging relatives.
That could be a nice boost, handing those in the middle and the bottom a
little more cash. Except that it just vanishes after five years. Thus the
plan looks like it could give lower-income Americans a good deal, so long as
you only focus on the near term.
The plan also repeals the personal exemption, which currently allows
families to deduct $4,050 per person from their overall tax bill, taking
away a big benefit. The expanded Child Tax Credit, as well as nearly
doubling the standard deduction that 70 percent of Americans use to reduce
their tax bills, is meant to help make up for such a painful change.
But those provisions only go so far. As New York University School of Law
professor Lily Batchelder pointed out on Twitter, under the Republican plan,
two married people with full-time minimum wage jobs raising two children
get no additional benefit. Neither does a married couple that’s retired and
living off less than $20,000 a year. Passing the tax package would do
nothing for these families.
Meanwhile, the phase-out of the new $300 dependent credit neatly coincides
with a big benefit for the ultra-rich. Currently, just the wealthiest 0.2
percent of estates pay any taxes when handing money down to their heirs; the
Center on Budget and Policy Priorities calls the estate tax “the most
progressive part of the tax code.”
But the Republican proposal would start raising the dollar amount at which
families are subject to the estate tax, letting more and more escape it,
until finally scrapping it altogether six years later. That represents a $20
million benefit for the 330 estates worth more than $50 million in this
country. A year after the plan takes back a hundred-dollar credit for poorer
families, it makes permanent a million-dollar giveaway to rich ones.
Other goodies for the wealthy also stay forever. They get the elimination of
the Alternative Minimum Tax, which ensures the rich can’t completely game
away their tax bill. They get a lower pass-through tax rate on businesses
like law firms and real estate brokerages that, even with some guidelines in
place, opens up a huge loophole for those with creative accountants.
Corporations get the biggest reduction in their tax rate ever, which they
keep in perpetuity.
Even the conservative Tax Foundation, which predicts a modest boost for most
families after tax reform, acknowledges a much bigger benefit for people
making $1 million or more.
And the tax changes aren’t the end of the story. The tax plan is estimated
to cost $1.5 trillion. Once the deficit starts to bloat, some in the
Republican Party are likely to start agitating for spending cuts to bring
the budget back in line. If and when that happens, programs that the lowest-
income Americans rely on will be first on the chopping block. The CBPP
predicts that this will all end up leaving most children, people who rely on
food assistance, and the elderly worse off. For them, the bargain of
cutting taxes and then cutting spending is one that they will lose.
Nothing is yet set in stone. The tax package now heads to the Senate, where
it will face some lawmakers who are skeptical of a number of provisions.
Some business groups are already aligning themselves against this
legislation. Everything could be up for debate all over again.
But the overall message House Republicans sent is crystal clear. This tax
package is not about helping those who need it the most. It’s about
significantly lowering taxes on the rich and offering a few crumbs to
everyone else. | W***o
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