The following article by Jeff Stein was posted on the Washington Post website November 29, 2017:
A number of studies have made clear that the tax bill Senate Republicans are trying to pass this week offers some of its biggest rewards to wealthy Americans. The GOP’s Tax Cuts and Jobs Act would cut taxes on wealthy Americans, while raising taxes on those earning between $10,000 and $75,000 over the next decade, according to the Joint Committee on Taxation, Congress’s official scorekeeper. The Tax Policy Center found that everyone outside the top 5 percent of income earners would see a significantly smaller tax cut in both the short term and the long term.
At a time of high inequality, when many of the economy’s rewards have already flowed to the wealthy, critics of the plan say this is an unnecessary gift. The plan “provide large benefits to the wealthy but little or nothing to everyone else,” says the Center on Budget and Policy Priorities, a left-of-center think tank, citing its large corporate tax cut and reduction of the estate tax. An NBC/Wall Street Journal pollfrom September found that 62 percent of Americans think taxes on the wealthy should go up. Twelve percent think they should go down.
But Senate Republicans say that they are not worried that the bill would disproportionately help the wealthy — at least according to 10 interviews with Republican senators Tuesday. Here’s why:
Sen. James Lankford (R-Okla.): “Obviously, there will be more benefit for people that pay more — if you pay a lot more, and there’s any change for that, then there will be a greater difference on it . . . You have the bottom 50 percent of earners who don’t pay any taxes at all . . . It’s hard to say the bottom 50 percent is not getting anything, because the bottom 50 percent is not paying anything now.”
Lankford is referring to the fact that about 47 percent of Americans do not pay federal income taxes. Nearly two-thirds of those Americans do pay payroll taxes, which come directly out of one’s paycheck to fund Social Security and Medicare. (The statistic is the source of the “47 percent tape” that helped sink Mitt Romney’s 2012 presidential campaign.) Republican leadership has thwarted a conservative proposal to expand tax credits for low-income families paying payroll taxes alone.
Sen. Johnny Isakson (R-Ga.): “The upper 1 percent is going to pay 49 percent of the burden. The lower 98 percent is getting a better deal than anybody else . . . If you just apply the math, it means 98 percent of people who pay taxes are getting a better deal than the upper 1 percent.
“If you make that comparison, I think it’s obvious that people who make money are going to pay more in taxes than people who don’t.”
In a follow-up email, Isakson spokeswoman Amanda Maddox said: “The point Senator Isakson was making is that the top one percent are already paying the largest share in taxes, so what you should be looking at is the percentage cut that each income group is receiving.”
Maddox pointed to the following chart by the Joint Committee on Taxation:
If you look at the tax rate change per income bracket, the wealthiest do not see their rates decreased by a substantially greater margin than the middle and lower classes. However, the rich get to keep more money from each percentage point reduction in their tax rate than the poor do.
Sen. Pat Roberts (R-Kan.): “In the real world, the markets sort of take over. The market is sort of off the charts here today expecting the tax bill to pass . . . If it does not pass, there are other considerations, meaning control in 2018. For that matter, the future of the Republican Party; for that matter, I have the gavel in Agriculture [Committee], I would like to get a farm bill passed.”
Roberts continued: “You’re asking me if it would increase income inequality — the whole aim of the bill is to [help] the middle class and also those who are less fortunate, so they can be part of this whole enterprise. Whether that’s going to happen or not, I can’t tell you. And I don’t think anybody else can with any factual basis. I guess my answer to you is, well, of course if that is the case, we’ll have to take care of it. This isn’t over with just passing this bill. … I think any tax reform bill will take a year or two to shake out and also a year or two to fix.”
Sen. John Boozman (R-Ark.): “For those who pay a lot more tax, you certainly have a potential for them to get more.”
Asked whether the rollback of the estate tax would help the rich, Boozman added that he thought doing so would help farmers who are subject to it: “I think most people feel like it’s double taxation. You’re taxed at your death, it’s not hard at all to accumulate many millions of dollars in hard equipment these days,” Boozman said. “The superwealthy have the ability to avoid the tax anyway.”
Sen. Ted Cruz (R-Tex.): “Income inequality increased dramatically under President Obama. High taxes, high regulations, and big government benefit the rich and hurt working men and women.”
Sen. Tim Scott (R-S.C.): “We’ve done a good job focusing on folks who are hard-working, often living paycheck to paycheck.”
Sen. John Neely Kennedy (R-La.): “You can find an analyst to say just about anything you want to say. Let me tell you about economic forecasting. There are 300 PhDs and economists at the Fed, and not a single one of them called a meltdown in ’08. . . . Economic forecasting around this place in the last 10 years — let’s be fair, the last 8 years — makes those psychic hotlines look reputable.”
Sen. Richard C. Shelby (R-Ala.): “I don’t think it is [helping the rich more than the poor]. I guess you could argue it is. I think it does a lot for most people — I wouldn’t say everybody . . . I’m not worried about the rich in this country. The rich generally take care of themselves. Out of a country of 300 million people, there aren’t that many really rich, rich people. I do worry about the people who work every day that are paying more than their fair share”
Sen. Rand Paul (R-Ky.) cited the doubling of the standard deduction as a big win for middle-income families: “The tax cut, if anything, is probably targeted more toward the lower-middle class and the working class than it is the upper class . . . The changes in the upper echelons are getting very little if any change.”
Sen. James M. Inhofe (R-Okla.): “They’ve used this for so many years now that anything Republicans do is to reward the rich that they know better. We’re passed that bit of Charles E. Schumer propaganda.”
View the post here.