Saturday, November 4, 2017

The Math That Proves the Tax "Reform" Bill Will Raise Taxes On the Middle Class

David Stockman explains:
[W]e think the bill introduced yesterday is the biggest con job in years, and that the House GOP will struggle to avoid a complete implosion during the  mark-up and floor consideration scheduled for the next three weeks.

In the first place, it does not cut anything that could remotely be called middle class taxes by a
net dime over the next ten years; it actually increases them.

That's right. The official cost-out provided last night by the Joint Committee on Taxation shows that the bill will reduce total individual taxes (excluding corporate) by $929 billion over the next decade, but that number sounds big only because we are in Federal budget land. In fact, the individual income tax baseline for this period is $22 trillion-----so the entire "cut" amounts to just 4.2% of the total.

But the real skunk in the woodpile is the fact that more than 100% of this cut in individual income taxes is accounted for by three items, which will accrue overwhelmingly to the very wealthy.

To wit, the bill repeals the alternative minimum tax at a cost of just under $700 billion over the decade, phases out the estate tax at a cost of $172 billion and provides for the so-called business pass-thru rate of 25% at a cost of nearly $450 billion.

Add these three items up and you see our point about funny numbers. The sum of $1.32 trillion for these three items is $386 billion larger than the entire individual tax cut contained in the bill!
Stated differently, set aside these three items and the baseline individual income tax revenue over the next decade would be $20.9 trillion----meaning that the GOP's ballyhooed tax bill will raise taxes by $386 billion or 2% on everyone else. 

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