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REPUBLICAN TAX PLAN

Republicans plan to vote this week on their massive overhaul of the tax code. The details of their plan have evolved, and the devil is in the details, but there are 5 basic elements we know.

1. The top 1% of Americans will pay substantially less in taxes, and some corporations may end up paying nothing. The corporate rate would drop from 35 to 20%, but many of the deductions and loopholes will allow corporations to pay much less – some even nothing. Republicans continue to use the oft-debunked idea of trickle down economics as a way to convince us that jobs will be created by the corporate cuts, and that the savings will be shared with workers. There’s no other way to say it — that’s a bald-faced lie. Corporations are enjoying more profits than ever, but the benefits are not trickling down to workers.

2. Some middle class tax payers would see a savings, others will pay more. Economists have repeatedly told us the economy is stimulated when people have more money to spend. But a sizable portion of the middle class will pay more, not less. Americans in states with an income or sales tax will no longer be able to deduct those taxes from their federal taxes. Students will be taxed for tuition assistance. Mortgage deductions would be capped, and the property tax deduction would be eliminated. All this depends on which bill we’re talking about, the House or the Senate; but when we spend our time debating which deductions for the middle class will help or hinder tax payers – we’re missing the most important impact of this legislation — the creation of an unsustainable national debt.

3. By taking in less money to the treasury our national debt will increase enormously. That's because we won't be able to pay the debt down, it can only go up. According to Congress's Joint Committee on Taxation, the projected loss of revenue equates to at least $1.5 trillion in new deficits over a decade. Some economic analysts project more. Think of it like a credit card bill. For example, if you’ve accumulated a $5,000 debt, but can only pay the minimum, your finance charges keep accumulating, and you’ll never pay off your debt. Now consider that you take a pay cut and have even less to help pay down your credit card debt. You continue to use that credit card and the interest continues to rack up, but you can't make a dent in paying it off. This is what Republicans are suggesting we do.

4. With substantially less money to spend, Congress will make major cuts to programs serving middle class families. The House has already passed a budget that cuts nearly $6 trillion in Medicare, Medicaid, education and other public services. And now, in another attempt to kill the Affordable Care Act, the Senate version of the tax bill will end the individual mandate, leading to 13 million more Americans being uninsured.

5. Under the Republican plan, corporate tax cuts are permanent, while middle class cuts will expire in eight years. This scheme allows Senate Republicans the luxury of passing their bill with a simple majority, rather than the 60 votes they would otherwise require.

At a time when our nation desperately needs health care for all citizens, a massive infrastructure upgrade, and economic policy that narrows the wealth gap, not widens it, this Republican tax plan takes us in the wrong direction.

All you have to do is ask, WHO BENEFITS?

 


Committee to Elect Christine Brown
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