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If the tax bill is so great, why does the GOP keep lying about it?

Catherine Rampell on

The Tax Foundation, a center-right think tank, uses relatively optimistic assumptions about the economic effects of tax cuts. But even its analysts determined the bill would increase deficits by a half-trillion dollars over the next decade.

2. The tax plan primarily helps the middle class.

Nope. The biggest benefits go to higher-income Americans, both in raw dollar terms and as a percentage of income, as New York University School of Law tax professor David C. Kamin has illustrated.

To give you a sense of scale: Under the Senate bill, households making more than $1 million receive an average tax cut of nearly $50,000 in 2027; those making $40,000 to $50,000 get an average cut of $480.

Averages also disguise a lot. Lots of lower- and middle-income families won't benefit at all. Many will be worse off.

Under both the Senate and House bills, nearly half of households making less than $100,000 will see either a negligible tax change or even a tax hike in 2019, according to calculations from Martin Sullivan, chief economist at Tax Analysts. By 2027, that share rises to 61 percent under the House bill, which phases down some of the provisions that help middle-class families.

 

Things look even worse for this population when you recall that deficit-financed tax cuts must eventually be paid for somehow. "Somehow" likely includes cuts to government spending, which disproportionately benefits lower- and middle-income families.

3.The bill will hurt President Trump.

To be clear, we don't know precisely what either bill would do to his taxes, because Trump won't release his returns. But based on what we do know, it's safe to say he and his family stand to benefit yooge-ly.

For example, both the Senate and House tax bills would repeal the alternative minimum tax (AMT), which cost Trump tens of millions of dollars in the most recent (leaked) tax return we have, from 2005. Both bills offer big tax cuts for income from "pass-through" corporations -- such as the Trump Organization. And both bills would either kill or scale back estate taxes, allowing Trump's kids to inherit his fortune tax-free.

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