From the Left
House Speaker Paul Ryan (R-WI): “That’s the purpose of doing [tax reform]…The purpose of this is to get a middle-class tax cut.” [The Hill, 10/1/17]
Ways and Means Chairman Kevin Brady (R-TX): “I think those who benefit most are middle-class families struggling to keep every dollar they earn…” [Washington Post, 9/28/17]
President Trump: “No, I don’t benefit. I don’t benefit… In fact, very, very strongly, as you see, I think there’s very little benefit for people of wealth.” [Washington Post, 9/28/17]
But a look at analysis by the Tax Policy Center analysis shows that’s not true:
- 80% of the total tax cuts would go to the wealthiest 1% of Americans, who earn at least $900,000.
- One in three middle class families making between $50,000 and $150,000 would get a tax increase.
Data Source: Tax Policy Center
Recent press reports highlight that this tax reform framework benefits the wealthiest Americans while leaving the middle class behind.
“Despite repeated promises from Republican lawmakers that the plan is designed to provide relief to the middle class, nearly 30 percent of taxpayers with incomes between $50,000 and $150,000 would see a tax increase…” [Washington Post, 9/29/17]
“While some households would probably get tax cuts, others could end up paying more….The plan would not benefit lower-income households that do not pay federal income taxes. The president is not proposing measures like a reduction in payroll taxes, which are paid by a much larger share of workers, nor an increase in the earned-income tax credit, which would expand wage support for the working poor.” [New York Times, 9/27/17]
“The top 1 percent would be the biggest winners under Republicans’ plans to rewrite the tax code, according to a new analysis, while some moderate-income people would face tax increases.” [Politico, 9/29/17]
“Most of the tax break would go to high-income Americans…” [CNBC, 10/6/17]
Economists and tax experts agree that the Republicans’ plan would disproportionately help the wealthiest Americans.
Mark J. Mazur, Director of the Tax Policy Center: “It’s hard to see if you continue to have those provisions in a tax proposal that it doesn’t benefit high income individuals and households disproportionately” [New York Times, 9/29/17]
Eric Toder, Co-director of the Tax Policy Center: “A major feature is tax collections would shift dramatically, from businesses to individuals…” [New York Times, 9/29/17]
Kyle Pomerleau, Analyst at the Tax Foundation: “‘There is no strong policy justification for the special pass-through rate in the GOP’s plan,’ [said Pomerleau.] Since pass-through earnings represent around one-third of all income for the top 1 percent of taxpayers, Pomerleau added, the provision tilts the plan’s benefits toward the wealthy while favoring one kind of business over others.” [CNBC, 10/6/17]
Maya MacGuineas, President of the Committee for a Responsible Federal Budget: “It’s going to be hard to mold this into something where the middle class is the big winner. And the reason for that, or course, is that the upper-income earners are those that pay the most in taxes…If you’re going to reform the tax code, a lot of times it’s going to be the people who pay the most taxes who end up with those bigger breaks.” [NPR, 10/4/17]
Len Burman, Fellow at the Urban Institute: “‘One thing I find troubling about big, deficit-financed tax cuts is it kind of looks like a free lunch.’ Burman pointed out that the burden of the postponed taxes could fall on lower- and middle-income people in the future, through tax increases or cuts to programs that benefit those groups.” [Washington Post, 9/29/17]
Lily Batchelder, Law professor at New York University and Deputy Director of the National Economic Council under President Obama: “In broad brush strokes, they’re doing nothing for the bottom 35 percent, they’re doing very little and possibly raising taxes on the middle class, and they’ve specified tax cuts for the wealthy.” [New York Times, 9/27/17]
Republicans’ tax reform framework is a partisan exercise that cuts taxes for the wealthiest Americans at the expense of the middle class while exploding the nation’s deficit. True reform of the American tax code must be a collaborative, bipartisan effort.
Hamilton on Congress
By Lee H. Hamilton
I’ve been reminded recently of the old cowboy song, Home on the Range. You know the line, “Where never is heard a discouraging word”? That is not the United States right now. It feels like pretty much everywhere I turn, all I hear is discouragement.
Our institutions of government are paralyzed. We face serious national problems with no effective response in sight – or even, in some cases, an acknowledgement that a problem exists. We’re fighting over racism, identity, security and culture. Our political system appears dysfunctional and occasionally on the verge of breakdown.
All of this is serious. But the question we have to confront is not, “What’s going wrong?” It’s, “How do we respond?” Or, at the risk of seeming hopelessly out of step with the national mood, “How do we set about making a great country still greater?”
As always, the answer to our problems does not lie in efforts to tinker with the structures we’ve erected or the systems we’ve created. It lies in us – in the American people. Whatever our political beliefs, we share some characteristics that I think give us cause for hope.
I’ve always thought that Carl Schurz, a German-born U.S. senator from Missouri, summed up something basic about the American character when he said, on the floor of the Senate in 1872, “My country right or wrong; when right, to keep her right; when wrong, to put her right.”
Americans respect the ideals of this country. They’re devoted to those ideals – freedom, liberty, justice for all – and they want the nation to live up to them. They believe in fighting oppression and expanding opportunity, in the rule of law and making progress on Americans’ pursuit of happiness. They believe in the words of the Constitution’s preamble, “To strive for a more perfect union.”
We do not give up, and we always hold out hope that the country is fixable. Even when we believe the nation is falling short of its ideals, we’re moved not by malice or hatred, but because we want to make the United States stronger and fairer.
Americans in overwhelming numbers believe in and respect what this country stands for, appreciate the differences and the diversity that are our hallmark, and recognize those differences and diversity as a strength. This creates a remarkable degree of unity on broad goals. There is widespread acceptance of the notions that people here should have access to good health care, that we need to be good stewards of the environment, that everyone should have a fair shot at success, that voting should not be burdensome.
Americans believe in a strong national defense, that the U.S, ought to play a benign role in the world, that people of all kinds are welcome to engage in the political process, that civil liberties ought to be staunchly defended, and that we all deserve equality before the law. Our differences arise over the means of achieving those goals.
All of us also recognize that this nation has its faults – some of them deep-seated and stubborn. We believe that America can do better. But there is a broad streak of pragmatism in this country. Because of its size, diversity and complexity, it’s hard to get things done, and Americans understand this and often approach the country’s problems with sleeves rolled up.
Again and again in times of adversity, we see Americans of all backgrounds and political perspectives pitching in to help out. Americans believe in the values of hard work, the importance of family, self-sufficiency, community engagement and involvement. For the most part, they do not approve of people who incessantly and harshly criticize the country.
This is why, however dire things appear in Washington, I continue to believe that we have it within us to set the country back on a productive track. We know that in order for us to progress we all have to give something back – that with freedom and liberty comes responsibility. And when we see others stand up for the nation’s ideals and act to broaden opportunity for others, it sends, as Robert Kennedy said, “a ripple of hope” through the community that, in time, becomes an unstoppable current of change.
Lee Hamilton is a Senior Advisor for the Indiana University Center on Representative Government; a Distinguished Scholar, IU School of Global and International Studies; and a Professor of Practice, IU School of Public and Environmental Affairs. He was a member of the U.S. House of Representatives for 34 years.
Read our take on how things get done on the Hill (and how they don’t get done)...Here