The House GOP’s Tax Plan Is A “Bait And Switch”

The Republicans in both the House and Senate are falsely promoting their scam tax proposals as a big benefit to the middle class. Several tax experts have looked at the House plan and describe it as a Republican “Bait and Switch.”

In an obvious attempt to convince the public to support their plan, they primarily exaggerate the tax cuts (bait) to middle class Americans.  They minimize the size of cuts that go to the richest Americans. Multiple analyses show the greatest winners in the GOP House tax scam is the (switch) richest Americans. In addition, they suggest the huge 42% cut to the corporate rate will really benefit the middle class rather than America’s most profitable corporations. There is no free lunch, this huge corporate tax cut must be paid by someone and under the House plan it will be paid for on the backs of middle America.

The House tax scam plan offers modest temporary tax cuts for most middle class taxpayers in 2018 but these cuts are reduced and disappear within 8-10 years. Simultaneously, the bulk of the cuts immediately reward the wealthiest taxpayers and their share of the cuts grows over time.

The critics have dissected the Republicans’ House tax plans (the House plan will be voted on this week) and present tax data that clearly show the middle class is the big loser. According to the Tax Policy Center (TPC), by 2025, 50 percent of the tax cuts would go to the top 1 percent of households. About 80 percent of the middle class would get a modest tax reduction in 2018 of less than $800. Nearly 10 percent of the middle class would actually pay higher taxes in the first years. The top 1 percent would get an average of $37,000 in 2018 if the House bill is passed in current form.

Iowans would see similar effects resulting from the House tax bill. The Institute on Taxation and Economic Policy (ITEP) analyzed the House plan for Iowa taxpayers. The Iowa data below mirrors the national results presented by TPC.

“In 2018, the middle 20 percent of Iowa taxpayers will see an average tax cut of $790, compared to a $36,100 tax cut for the top 1 percent, a benefit 46 times higher for the very rich, whose annual income averages $1.2 million. The inequity grows by 2027, as the average middle-income cut falls to $340 (less than half of the 2018 figure) while the very rich get a $48,520 tax cut — a third greater than in 2018, and a benefit 143 times greater than the middle-income average. The top 20 percent take 61 percent of the tax benefit in 2018, and 69 percent of the tax benefit in 2027.”

Peter Fisher, research director of the nonpartisan Iowa Policy Project (IPP) commented on the inequality of the House Republicans’ plan.

“So much for boosting the middle class. The rich in Iowa do far better than middle and lower-income taxpayers in our state under the House tax plan,” said Fisher.

Fisher said the ITEP analysis shows tax increases for some Iowans as well.  Approximately 5 percent of Iowa taxpayers would see a tax increase in 2018, and that would rise to 13 percent by 2027.

Mike Owen, executive director of IPP provides more detail for future Iowa taxpayers. “This plan benefits the wealthy immediately, but disguises even greater benefits and disparities that will become apparent well after the next election,” said Owen.

Republicans are rushing their tax scam to a vote because they know the public will likely rebel once they learn the ugly details of the GOP’s tax scheme. This vote may come yet this week so Iowa’s three Republican Congressman need to hear from their constituents as soon as possible. Iowans can’t let them get away with their “Bait and Switch” deception.

by Rick Smith
Posted 11/15/17