Thursday, November 9, 2017

This is the Tax Cut 30 Million Middle Class Taxpayers Will Get From Tax "Reform"

David Stockman reports:
Indeed, on the eve of the House Ways and Means committee vote on the tax bill----which will then be barricaded by a no amendments "closed rule" when it goes to the full house-----the smoking gun is already
apparent. By 2027 (after the temporary $300 adult tax credit gimmick expires and all provisions of the Brady mark become fully effective), the middle quintile US family ( about 30 million filers between $55,000 and $93,000 of AGI) would find itself in a crap shoot.
That is, roughly two-thirds of filers (20 million units) would realize a $1,070 per year tax cut, while another 31% (roughly 9.5 million filers) would experience a $1,150 tax increase!

That's a whole lot of rolling dice----depending upon family size, sources of income and previous use of itemized deductions.

But here's the thing: For the heart of the middle class as a whole----30 million filers in the aforementioned income brackets---the statistical average tax cut would amount to $6.15 per week.

That's right. Two Starbucks cappuccinos and a banana!

Why are the banana eaters getting scammed? Because of the caviar eaters.

Stockman again:
The fact of the matter is that once the beltway swindlers and racketeers were accommodated, there was no room for a meaningful middle class tax cut. Period.

To pretend otherwise, as do Ryan and Brady in their public pronouncements, is to strain credulity---as the above distributional impacts so starkly confirm. And it also means setting-up mission impossible in terms of extracting "loopholes" or "incentives", as the case may be, from the IRS code that have become long settled policy and are now implanted in political cement.

Thus, to maintain the appearance of Reaganesque supply-side tax cutting, the House bill collapses the current seven brackets into four at a cost of $1.1 trillion over the coming decade. But to pay for that echo of the 1980s, the House plan wipes out $1.5 trillion of itemized deductions and credits, and thereby has ignited a firestorm of lobbying on Capitol Hill that will right soon demonstrate who is boss in the Imperial City (not the voters).

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