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Trump's tax proposal won't actually help the middle class. Here's what would.

Catherine Rampell on

That's because the expansion appears to be non-refundable (meaning it primarily helps higher-income filers), and it mostly serves to offset the framework's elimination of personal exemptions, explains Tax Policy Center researcher Elaine Maag.

Other more generous expansions would be possible though, including a version pushed by Republican Sens. Marco Rubio of Florida and Mike Lee of Utah.

What about the corporate tax code?

There are some changes that could arguably boost growth and productivity, some of whose benefits could (ahem) trickle down to workers. Cutting rates and eliminating distortionary loopholes could be helpful -- which is why Democrats previously said they'd support such a plan.

Only, though, if the plan were revenue neutral.

A revenue-negative plan most likely hurts growth in the long run, as Obama's former chief economist Jason Furman points out. More important, someone eventually has to cover the cost of unfunded tax cuts through some future combination of higher taxes and lower spending. Lower spending almost certainly would disparately hurt lower- and middle-income families.

Which is why the best thing elected officials can do to help the middle class would be to make sure any promised benefits are adequately funded. Which would mean raising rather than cutting tax revenue.

Something tells me that's not what Republicans have in mind here.

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Catherine Rampell's email address is crampell@washpost.com. Follow her on Twitter, @crampell.

(c) 2017, Washington Post Writers Group

 

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