Politics, Moderate

/

Politics

And the biggest loser in the GOP's tax plan is ... humans

Catherine Rampell on

"Why aren't the other hands up?" he said, laughing a bit.

This was no one-off embarrassment. A survey of 300 companies this summer similarly found that a tax holiday on the repatriation of overseas profits was more likely to lead to share buybacks, mergers and paying down debt than investment and hiring.

It gets worse. The Senate plan isn't just more generous to companies than it is to individuals. It effectively takes from low- and middle-income individuals to give to corporations.

The Senate bill makes the corporate rate cuts permanent. Which is expensive. So expensive, in fact, that the cuts would cause the bill to run afoul of those rules that allow passage with a simple majority vote.

Senate Republicans came up with a solution, however. To offset the cost of those corporate cuts, they did a few things that hurt individuals.

First, they decided to "sunset" -- that is, make temporary -- nearly all of the goodies for households, such as the doubling of the standard deduction and expanding of the child tax credit, in their bill. Further, they changed the way that individual tax brackets are calculated so that households move into higher marginal rates more quickly than they do under current law.

Finally, they added the repeal of the individual health-insurance mandate, which would have the not-very-intuitive effect of reducing tax subsidies for lower- and middle-income Americans, some of whom will cease buying health insurance without the mandate.

The net result of these changes: Over time, fewer American households get tax cuts. In fact, as of 2021, households making $10,000 to $30,000 would see their taxes go up on average, according to a report released Thursday by the Joint Committee on Taxation, Congress' nonpartisan internal analysis shop.

And, by 2027, every income group under $75,000 would experience tax increases, on average, relative to what they would pay if Congress left the law unchanged.

 

This doesn't even account for other effects of repealing the individual mandate that would also hurt many human-persons. Premiums, for instance, would spike, as healthier and younger people dropped out of individual insurance pools.

Nor does it include the fact that passing tax cuts this year would trigger automatic cuts to Medicare starting in January. Not a decade from now, or five years from now, but January. Overriding these cuts would require 60 votes in the Senate.

Perhaps because the legislative process has been so rushed, many senators don't appear to even know that these cuts are in the offing. Even so, when given the opportunity to vote for an amendment explicitly ruling out cuts to Social Security, Medicare and Medicaid if their tax bill blows a hole in the budget, Republicans voted no Wednesday.

Person-persons, rather than corporate-persons, may still be the ones who vote. But they're clearly not Republican lawmakers' most prized constituents.

========

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

(c) 2017, Washington Post Writers Group

 

Comments

blog comments powered by Disqus
 

Social Connections

Comics

Andy Marlette Darrin Bell Michael Ramirez Chris Britt Gary Varvel Marshall Ramsey