[Vision2020] GOP tax framework would give outsized benet to top 1 percent

[Nicholas Gier]

By David Shernski - The Washington Times - Updated: 4:08 p.m. on Friday,
September 29, 2017

The Republican tax framework unveiled this week would create an immediate
tax cut for all income levels, but the top 1 percent would receive 50
percent of the total tax benets in 2018 and would stand to gain more over
time than everyone else, according to a report released Friday. The House’s
top tax-writer dismissed the report as a misleading look at the bare bones
of a plan Congress has yet to write.

But the study is sure to provide material for critics of President Trump’s
tax plans who argue that the outline is skewed to benet the wealthy — a
charge that the White House and congressional Republicans have been working
furiously to beat back in recent days.

In 2018, taxes would decline by nearly $1,600 on average, with taxpayers in
the bottom 95 percent of income levels seeing a 1.2 percent tax cut and
people making more than $730,000 seeing after-tax incomes increase 8.5
percent, according to the report from the Tax Policy Center released
Friday.

About 12 percent of taxpayers — including one-third of people making
between $150,000 and $300,000 — would pay more, mostly because of the loss
of itemized deductions, the report said. And by 2027, taxpayers making less
than $150,000 would receive an average tax cut of 0.5 percent or less,
while the top 1 percent would see after-tax income increase 8.7 percent,
the report found.

Taxpayers making between $150,000 and $300,000 would on average pay $800
more in taxes in 10 years. By that time, taxes would also rise for a
quarter of taxpayers, including 30 percent of people making between $50,000
and $150,000 and 60 percent of people making between $150,000 and $300,000.

That’s in part because the plan replaces personal exemptions people can
take for family members, currently indexed for ination, with credits for
children and non-child dependents that aren’t indexed, the report said.

The center said its analysis was based partly on proposals outlined in the
House GOP’s “Better Way” tax agenda unveiled last year and the Trump
administration’s outline unveiled in April. The study also says the
proposal would reduce federal revenues by $2.4 trillion over the next
decade and $3.2 trillion in the ten years after that. T

The study accounts for some behavioral changes as result of the tax plan
but assumes the tax changes don’t affect the overall level of economic
activity. The center said it will be releasing supplemental estimates that
look at macroeconomic eects soon.

Republicans have repeatedly said they prefer a robust “dynamic” scoring
model that factors in macroeconomic effects of tax policy changes, and that
such models will show that their tax cuts will at least in part pay for
themselves. House Ways and Means Committee Chairman Kevin Brady, the
House’s top tax-writer, said in response that the “so-called study” is
“misleading, unfounded, and unbiased.”

“TPC makes a variety of overreaching and unrealistic assumptions about
policy decisions Members of Congress still have to make as we draft
pro-growth tax legislation,” said Mr. Brady, Texas Republican. He said
Republicans are unitied in delivering tax reform that will lower taxes on
middle-class Americans. “We will deliver on this promise and our bill will
improve the lives of all Americans,” Mr. Brady said.

White House budget director Mick Mulvaney said earlier Friday it’s
difficult to make assumptions about the effects of the tax plan when so
many details have yet to be lled in. “Keep in mind: We don’t even know
where the brackets kick in yet,” Mr. Mulvaney said on Fox Business Network.
“So I think folks [who] come out and say that they know exactly what this
plan is going to do to this individual family or that individual business
[are] simply jumping to political conclusions and not going through the
serious process of looking at how we make” laws

-- 

A society grows great when old men plant trees whose shade they know they
shall never sit in.

-Greek proverb

“Enlightenment is man’s emergence from his self-imposed immaturity.
Immaturity is the inability to use one’s understanding without guidance
from another. This immaturity is self- imposed when its cause lies not in
lack of understanding, but in lack of resolve and courage to use it without
guidance from another. Sapere Aude! ‘Have courage to use your own
understand-ing!—that is the motto of enlightenment.

--Immanuel Kant
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