House Republicans Unveil Tax Reform Plan, But Don’t Get Your Hopes Up
They say there are only two things that are certain in life: death and taxes. I do believe they forgot one other certainty, though: Republicans designing tax reform to help the wealthy. If (and a big if) the GOP manage to pass any form of tax legislation, it will almost definitely favor wealthy Americans. After a short delay, Speaker Paul Ryan and House Republicans unveiled their tax reform and it is as underwhelming and one-sided as we knew it would be.
The plan that was released Thursday is titled the “Tax Cuts and Jobs Act.” Wow, really nailed the name guys. I guess “Rich White Guys Helping Rich White Guys” is a mouthful. Either way, that’s what the plan does. The plan is highlighted by tax savings that will mostly go to large corporations and wealthy Americans, the elimination of tax credits, all while the prospect of job creation isn’t made clear.
The largest tax cut will go to the corporate tax rate, currently at 35% for those with the highest earnings. The plan aims for a 20% rate for corporations, which would drop the United States well below other developed nations. This drastic cut would result in billions of dollars in lost tax revenue, despite the fact that many of the largest corporations pay very little in taxes.
Corporations are not people, so what about helping the middle class? In response to that, the GOP would like to eliminate estate taxes for Americans that make between $5.5 and $11.1 million. Estate taxes are imposed when someone dies and transfers their wealth to family members. In 2000, there were 52,000 estates paid the tax, while last year there were only 5,000. This new rule would only benefit an estimated 3,200 wealthy individuals, but cost taxpayers $172 billion. Seeing the theme here?
So when do normal folks get a break or save some money? Never, if Paul Ryan has anything to say about it. Most likely, the only change middle class Americans will experience would be from the restructure of individual tax brackets. The Tax Cuts and Jobs Acts will drop to 4 tax brackets, down from the current 7. These will 12% beginning at $12,000, 25% beginning at $45,000, 35% at $200,000, and 39.6% beginning at $500,000. There you go, those that make a respectable $40,000 per year will save 3% (woo).
Another big move made in the new tax plan is to eliminate certain tax credits and deductions (because obviously they don’t help rich people). Some of these eliminations are: a tax credit for child adoption worth $13,750, disallowing teachers to write off school supplies, the deduction of major medical costs, and the deduction of losses from natural disasters. It isn’t easy trying to simplify the tax code, while keeping tax loop holes. They’re doing all they can, guys!
No surprises here everyone. House Republicans unveil their tax plan Thursday morning, everyone realizes it sucks before lunch, and then many key Republicans are against the bill before Friday’s session. House Speaker Paul Ryan and President Donald Trump worked together to make the Tax Cuts and Jobs Act, and boy does it show. This one is going to take a while, so sit back and enjoy the farce that it American politics.
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