2017-12-10 — chicagotribune.com
If President Donald Trump and congressional Republicans end up paying for their proposed $1.4 trillion tax cut by reducing spending or raising taxes later on, most Americans making less than $86,000 would be worse off, according to a new report by the Tax Policy Center, a nonpartisan think tank.
Republicans have yet to say how they intend to pay for the tax cut. Originally, Treasury Secretary Steven Mnuchin argued the tax cut would completely pay for itself because the economy would grow substantially faster, a claim that has not been backed up by independent research. Congress' official scorekeepers estimate that the tax cut would add $1 trillion to the federal deficit, even after taking into account some additional economic growth.
At some point, that will have to be paid for, and top Republican lawmakers, including House Speaker Paul Ryan, R-Wis., have indicated they plan to take a hard look at welfare spending and other safety net programs for potential trimming.
The Tax Policy Center warns in its "Winners and Losers" report released Friday that paying for the tax cut by reducing programs that help the poor and lower middle class would leave many Americans in the bottom 60 percent in a worse spot than they would have been without the GOP tax bill.
The House bill would cut taxes for 76 percent of Americans next year and raise taxes on just 7 percent, according to the Tax Policy Center. But those numbers look substantially different once the think tank factored in how to pay for the bill. If every household were required to pay the same amount to fund the tax cuts - roughly $1,200 - in 2018, then only 27 percent of Americans would get a cut and 73 percent of Americans would essentially be getting a tax hike. The vast majority of the families that would be worse off would be in the low and middle class.
Critics of the report say the Tax Policy Center is running hypothetical scenarios. There are no proposals on the table to make draconian cuts or to make every American pay a fee or tax... But the Tax Policy Center says this is actually a pretty similar scenario to what the Trump budget proposed earlier this year with its cuts to various welfare and safety net programs that mostly impact moderate-income households. The Tax Policy Center is also assuming a modest increase on higher-income households.
Comments: Be the first to add a comment