Just another wealth redistribution upwards from the GOP. They love being the reverse Robin Hoods!:
President Trump and Republican leaders have positioned their sweeping tax rewrite as a way to cut taxes on the middle class. But some top officials are now saying the plan may not benefit everyone in that income group.
The acknowledgment could complicate the administration’s ability to sell the tax plan, which is already facing questions from Republicans and Democrats over the cost and effect of the ambitious rewrite.
Those questions have gotten more pronounced after an analysis last week by the Tax Policy Center, which found that the plan could cost $2.4 trillion over the next decade, with the biggest benefits flowing to businesses and the wealthiest Americans. The analysis found that nearly 30 percent of those in the middle class could see their taxes increase as a result of changes to the deductions and exemptions many middle-class Americans rely on to lower their tax bills.
The breakdown is based on the framework released by the “Big Six” group of Republican lawmakers and administration officials, which did not include many details that could change the distributional impact, including an increase to the child tax credit and the potential for a higher tax rate on the richest Americans. Yet top officials acknowledged this weekend that a tax cut for everyone in the middle class may not be achievable.
“You can’t make guarantees because every single person’s taxes are different,” Treasury Secretary Steven Mnuchin said in comments to ABC News on Sunday. “People take advantage of different things, so we can’t make that guarantee. But we can say that’s our objective and that’s what we’re working to, and we want to protect the middle class.”
The comments are a break from the 2016 presidential campaign, when Mr. Trump’s advisers promised he would instruct Congress to write a bill that did not increase taxes for any low- or middle-income taxpayers. Stephen Miller, who advised Mr. Trump during the campaign and is now his chief policy adviser, said that “in sending our proposal to the tax-writing committees, we will include instructions to ensure all low- and middle-income households are protected.”
Speaker Paul D. Ryan of Wisconsin said on Sunday on CBS’s “Face the Nation” that while the “purpose of this is to get a middle-class tax cut,” it is impossible to ensure that every middle-class American would see their tax bill go down.
The framework proposes to double the standard deduction for individual taxpayers and increase the child tax credit by an undetermined amount. It would eliminate some personal exemptions and several deductions, including those for state and local taxes and for out-of-pocket medical costs.
The elimination of the state and local tax deduction could adversely affect those in the upper middle class, who tend to make heavy use of the tax break. More than a third of the taxpayers who earn $150,000 to $300,000 could see their taxes go up next year, the Tax Policy Center report stated. The average tax bill for all income groups would decline by $1,600, or 2.1 percent, in 2018, the report said.
A tax plan that does not offer a cut for everyone in the middle class could hurt its chances as Republicans try to pass a bill largely along party lines.
On Monday, Senator Rand Paul, Republican of Kentucky, tweeted a critique of the new analysis.
Republicans have signaled that they will try to push any tax bill through the Senate reconciliation process, which would make it immune to a Democratic filibuster. That means Republicans can afford only two Senate defections from their ranks if they hope to pass a bill.
Mr. Paul was one of a handful of Republican senators whose public opposition doomed a health care bill that party leaders attempted to pass via reconciliation in September.
“We know that the rich guys are going to be fine,” said Aparna Mathur, a resident scholar in economic policy studies at the conservative American Enterprise Institute in Washington. “The real question is what happens at the bottom.”
Without specifying more details, such as the income thresholds for each tax bracket, Republicans cannot rule out tax increases on, for example, a middle-class family of four that incurs high medical costs not covered by insurance. Economists say such a family could end up paying more if the value of the new tax rates and expanded standard deduction falls short of the value of tax breaks the family enjoyed previously.
Party leaders say they are taking steps to protect middle-class families from tax increases.
On Monday, Representative Kevin Brady, Republican of Texas and the chairman of the House Ways and Means Committee, laced into the Tax Policy Center projections, calling them a “work of fiction that Stephen King would have been proud of.” Mr. Brady said that it was impossible to assess the tax plan without details on what income levels would fall into the new tax brackets or the size of the yet to be determined child tax credit.
“They’re just guessing, and guessing poorly,” Mr. Brady said.
But Mr. Brady would not definitively guarantee that no middle-class taxpayers would see their tax bills increase from the final tax legislation.
“I will guarantee that we are going to work hard to lower taxes on every American, increase their paychecks and dramatically simplify the code for them,” he said.
Pressed as to whether some may still face higher tax bills, Mr. Brady added, “I guarantee we are going to improve the lives of every American by driving down taxes and increasing paychecks.”
https://www.nytimes.com/2017/10/02/...n-region®ion=top-news&WT.nav=top-news&_r=0
President Trump and Republican leaders have positioned their sweeping tax rewrite as a way to cut taxes on the middle class. But some top officials are now saying the plan may not benefit everyone in that income group.
The acknowledgment could complicate the administration’s ability to sell the tax plan, which is already facing questions from Republicans and Democrats over the cost and effect of the ambitious rewrite.
Those questions have gotten more pronounced after an analysis last week by the Tax Policy Center, which found that the plan could cost $2.4 trillion over the next decade, with the biggest benefits flowing to businesses and the wealthiest Americans. The analysis found that nearly 30 percent of those in the middle class could see their taxes increase as a result of changes to the deductions and exemptions many middle-class Americans rely on to lower their tax bills.
The breakdown is based on the framework released by the “Big Six” group of Republican lawmakers and administration officials, which did not include many details that could change the distributional impact, including an increase to the child tax credit and the potential for a higher tax rate on the richest Americans. Yet top officials acknowledged this weekend that a tax cut for everyone in the middle class may not be achievable.
“You can’t make guarantees because every single person’s taxes are different,” Treasury Secretary Steven Mnuchin said in comments to ABC News on Sunday. “People take advantage of different things, so we can’t make that guarantee. But we can say that’s our objective and that’s what we’re working to, and we want to protect the middle class.”
The comments are a break from the 2016 presidential campaign, when Mr. Trump’s advisers promised he would instruct Congress to write a bill that did not increase taxes for any low- or middle-income taxpayers. Stephen Miller, who advised Mr. Trump during the campaign and is now his chief policy adviser, said that “in sending our proposal to the tax-writing committees, we will include instructions to ensure all low- and middle-income households are protected.”
Speaker Paul D. Ryan of Wisconsin said on Sunday on CBS’s “Face the Nation” that while the “purpose of this is to get a middle-class tax cut,” it is impossible to ensure that every middle-class American would see their tax bill go down.
The framework proposes to double the standard deduction for individual taxpayers and increase the child tax credit by an undetermined amount. It would eliminate some personal exemptions and several deductions, including those for state and local taxes and for out-of-pocket medical costs.
The elimination of the state and local tax deduction could adversely affect those in the upper middle class, who tend to make heavy use of the tax break. More than a third of the taxpayers who earn $150,000 to $300,000 could see their taxes go up next year, the Tax Policy Center report stated. The average tax bill for all income groups would decline by $1,600, or 2.1 percent, in 2018, the report said.
A tax plan that does not offer a cut for everyone in the middle class could hurt its chances as Republicans try to pass a bill largely along party lines.
On Monday, Senator Rand Paul, Republican of Kentucky, tweeted a critique of the new analysis.
Republicans have signaled that they will try to push any tax bill through the Senate reconciliation process, which would make it immune to a Democratic filibuster. That means Republicans can afford only two Senate defections from their ranks if they hope to pass a bill.
Mr. Paul was one of a handful of Republican senators whose public opposition doomed a health care bill that party leaders attempted to pass via reconciliation in September.
“We know that the rich guys are going to be fine,” said Aparna Mathur, a resident scholar in economic policy studies at the conservative American Enterprise Institute in Washington. “The real question is what happens at the bottom.”
Without specifying more details, such as the income thresholds for each tax bracket, Republicans cannot rule out tax increases on, for example, a middle-class family of four that incurs high medical costs not covered by insurance. Economists say such a family could end up paying more if the value of the new tax rates and expanded standard deduction falls short of the value of tax breaks the family enjoyed previously.
Party leaders say they are taking steps to protect middle-class families from tax increases.
On Monday, Representative Kevin Brady, Republican of Texas and the chairman of the House Ways and Means Committee, laced into the Tax Policy Center projections, calling them a “work of fiction that Stephen King would have been proud of.” Mr. Brady said that it was impossible to assess the tax plan without details on what income levels would fall into the new tax brackets or the size of the yet to be determined child tax credit.
“They’re just guessing, and guessing poorly,” Mr. Brady said.
But Mr. Brady would not definitively guarantee that no middle-class taxpayers would see their tax bills increase from the final tax legislation.
“I will guarantee that we are going to work hard to lower taxes on every American, increase their paychecks and dramatically simplify the code for them,” he said.
Pressed as to whether some may still face higher tax bills, Mr. Brady added, “I guarantee we are going to improve the lives of every American by driving down taxes and increasing paychecks.”
https://www.nytimes.com/2017/10/02/...n-region®ion=top-news&WT.nav=top-news&_r=0
