epa06228292 US President Donald J. Trump (C) meets with House Ways and Means Committee Chairman Kevin Brady (R), Ways and Means Committee Ranking Member...
SHAWN THEW

Millions face tax hike under controversial Republican tax plan

Updated

Republicans are understandably nervous about the political position they’ve found themselves in. A year after an election that vaulted them to total dominance over the levers of federal power, GOP officials have effectively nothing to show for their efforts; Donald Trump is the least popular first-year president of the polling era; the Russia scandal is an existential crisis for the Republican White House; and Democrats just won sweeping victories in off-year elections.

It’s against this backdrop that Republican leaders are convinced that an unpopular tax plan will put things right. That’s exceedingly unwise.

Part of the problem is that many of the provisions in the plan are political suicide. The current version of the GOP legislation scraps all kinds of deductions and tax credits that enjoy broad public support. Everything from medical expenses to adoption costs to education costs are on the chopping block because Republicans can’t figure out how else to pay for their tax breaks.

GOP officials are quick to point out, of course, that the details of their plan haven’t been finalized. That’s true. But they wrote the pending legislation, and this is what they’ve put on the table for everyone to see.

The other part of the problem is that, according to multiple independent analyses, millions of Americans would end up paying more, not less, under the Republican proposal. The Washington Post reported yesterday:

[A] growing number of nonpartisan analyses show that some middle-class Americans would not get more money in their pockets under the GOP plan. Instead, they would face higher tax bills, a potential pitfall in selling this plan to the public and to enough lawmakers for it to pass.

Nine percent of middle-class tax filers (those earning between $48,600 and $86,100) would pay more in taxes next year, according to an analysis by the nonpartisan Tax Policy Center released Wednesday. By 2027, 31 percent of middle-class filers would see tax hikes, the center said.

The Tax Policy Center analysis, which is online in its entirety here, found that the bulk of the cuts would benefit the wealthiest Americans, while the number of middle-class households facing tax increases would steadily grow over the course of the next decade.

And while some on the right will probably dismiss the TPC findings as some kind of outlier, let’s also not forget that analyses from the Joint Committee on Taxation and the New York Times came to similar conclusions.

What remains is a plan that disproportionately benefits the wealthy, which is the opposite of what Americans want, scraps popular deductions and tax credits, which is the opposite of what Americans want, and imposes tax hikes on millions in the middle class, which is the opposite of what Americans want.

This is how Republicans plan to become more popular.

New York’s Jon Chait joked the other day, “The plan reads as if it was reverse-engineered from 30-second political attack ads.”

Again, GOP officials continue to insist that they’re still working on their legislation – which is expected to get a floor vote in the House next week – and they fully intend to make it better. Ask Republicans how they’ll achieve this, and you’ll get a lot of blank stares, but they’re nevertheless determined to figure something out.

Time will tell whether those efforts bear fruit, but as things stand, the GOP’s tax plan appears to be a disaster.

Tax Policy and Tax Reform

Millions face tax hike under controversial Republican tax plan

Updated