Authored by: Matt Palumbo
Admittedly, I never expected that I’d have to debunk the myth that President Donald Trump’s “Tax Cuts and Jobs Act” raises taxes on the majority of Americans, because the majority of Americans would be able to refute such a claim by glancing at their paychecks.
But apparently a select few in Congress are hoping that nobody is paying attention.
Speaking earlier this month at a town hall in Culver City, California, Nancy Pelosi blasted the tax bill. “Eighty-six million middle-class families will see a tax increase while they [the GOP] advertise it as a middle-class bill.”
How could that possibly be, when the Trump tax cuts reduce rates for a single and married person?
The personal exemption was also killed in exchange for a doubling of the standard deduction, and brackets are indexed to the consumer price index, to prevent people from being pushed into higher brackets due to inflation. The corporate tax rate was also cut to 21%.
So how do we go from seeing nearly every income tax bracket decline, and a doubling in the standard deduction, to “86 million families” seeing a tax hike? According to the Washington Post:
In 2018, most U.S. taxpayers can expect some kind of tax cut, according to just about every analysis. The nonpartisan Tax Policy Center found that more than 80 percent of taxpayers would get a tax cut, with less than 5 percent getting a tax increase.
But, without saying so, Pelosi focuses on the last year of the tax cut — 2027. Then, the numbers will have flipped, with only 25 percent of taxpayers getting a tax cut and more than 50 percent getting a tax increase. An even greater percentage of tax increases is in the bottom 80 percent of taxpayers — what Pelosi calls the “middle-class.” That’s where she gets her 86 million figure.
As the Post notes, “Republicans did this to keep the whole tax cut — especially the corporate tax cut — in a budget box that allowed only for a $1.5 trillion increase in the federal deficit over 10 years.”
So, by “86 million families will see a tax hike,” she means “86 million families will see their taxes go back to what they were in 2017.” It’s great to see Nancy suddenly concerned about taxpayers being able to keep their “crumbs.”
It was an early complaint by Democrats that the middle class tax cuts were temporary. Bernie Sanders even stretched estimates further, saying that the tax plan “raises taxes on 92 million middle-class families by the end of the decade.”
In response, Sen. Ted Cruz began publicly voicing support to introduce legislation to make the middle class tax cuts permanent in December of last year. He didn’t find any takers in the Democratic Party.
In mid-March, some Republicans began teasing a “phase two” of tax cuts, with The Hill reporting that making the middle class tax cuts from the “Tax Cuts and Jobs At” permanent are part of the agenda.
It’s not all too surprising that Democrats haven’t actually showed any legislative effort in keeping the middle class tax cuts against Trump. If they did, they wouldn’t be able to make ridiculous statements, like that 86 million Americans are going to see a tax hike. Ironically, if it weren’t for them, that wouldn’t be true.