The Republican tax plan is out—and Democrats haven’t read it. It’s obvious because multiple publications have noted how this will be a tax break for America’s middle class. Here’s The Wall Street Journal:
Under current law, in 2018, a married couple with two children making $60,000 would get a $13,000 standard deduction and four personal exemptions each worth $4,150. That means they would pay taxes on $30,400 of taxable income. Their base tax bill of $3,608 would be reduced by $2,000 in child tax credits for a total income tax of $1,608.
Under the House plan, the same married couple with two children would get $3,800 in tax credits, $3,200 for the two children and $600 for the two parents. The same family would get a $24,400 standard deduction but no exemptions, for $35,600 of taxable income. Their base tax bill of $4,272 would be reduced by the $3,800 in credits for a total income tax of $472.
The House bill also expands the child credit for the upper-middle class. Currently, the credit starts phasing out for individuals with incomes above $75,000 and married couples with incomes above $110,000. Under the House bill, those thresholds move up to $115,000 and $230,000.
Cortney already wrote about how the Washington Post’s fact checkers torched Senate Democrats for peddling the lie that this plan will be a burden for America’s middle class, specifically a $794 tax increase for families making less than $86,100 a year; a talking point that was borne out of a document from the Democratic Policy and Communications Committee:
That document had this line on each state page: “The average tax increase on families nationwide earning up to $86,100 would be $794, a significant burden for middle-class families.”
This factoid in turn was sourced to a report by Democrats on the Joint Economic Committee. So we tracked that down.
That report had this line: “If enacted, the Republican tax reform proposal would saddle 8 million households that earn up to $86,100 with an average tax increase of $794 — a substantial expense for working families.”
Note the difference. The original report referred to 8 million households receiving a $794 tax increase. Somehow, when it got communicated down the line, that nuance was lost and it was translated into a talking point referring to all working-class families.
In their haste to condemn the GOP tax plan, Democrats have spread far and wide the false claim that families making less than $86,100 on average will face a hefty tax hike. Actually, it’s the opposite. Most families in that income range would get a tax cut. Any Democrat who spread this claim should delete their tweets and make clear they were in error.
So, congratulations are in order for Senate Democrats, earning four Pinocchios for this drivel. The second towel slap came from CNBC, who were not having any of Democratic National Committee chair Tom Perez’s talking point nonsense. Perez said that this GOP tax plan would help the one percent of America etc., and repeated the lie that it will not help middle class families.
“So once again, this is a great day for the 1%, and for everybody else it's a terrible day,” he said. Afterwards, the financial news network slammed Perez for his pervasive talking point spewing rather than getting down to the details of the economics of the plan.
I know it’s par for the course here, but another development is that Democratic women in the Senate are now fleeing the very tax reform proposals they introduced prior to Donald Trump becoming president. Patrice Lee Onwuka of the Independent’s Women Forum noted this, specifically their recent aversion to child tax credit increases and cutting the corporate tax rate:
In 2014, New York’s Kristin Gillibrand introduced legislation to triple the child care tax credit, pleading “If you can’t afford child care, your choice is to leave your job to take care of your children. It doesn’t have to be this way.” But now that the opportunity to provide relief for moms is here, she’s changing her tune.
She blasted the Trump tax plan as “a cruel joke” and vowed “to oppose this corporate welfare that will harm New York’s middle class.”
Wisconsin’s Tammy Baldwin said of last Thursday’s budget vote, “I believe Wisconsin families need a tax break and that's what I'm working for.” However, the competing tax reform plan that she and Senator Cory Booker, D-N.J., introduced doesn’t offer a lot of tax relief for families, and it doesn’t simplify or change the tax code at all.
Senator Elizabeth Warren, D-Mass., made the case that Congress must simplify our complex and burdensome tax code in 2016, when she introduced legislation to make tax filing easier and free for some Americans. In a report, she explained that preparing and filing returns consumed almost 10 percent of the average federal tax refund.
Warren should be pleased that simplicity is one of President Trump’s four principles for tax reform. Instead she called the Trump plan “warmed-over” and says it “delivers massive tax cuts to millionaires and giant corporations and kicks working families to the curb.”
Just this summer, California’s Senator Dianne Feinstein said, “I think one might look at the corporate rate. I think that’s a fair thing to do to see that it’s regionalized and equalized.” Yet, when the Trump proposal was released, she failed to mention the proposed corporate tax relief and just painted the entire framework as “a one-sided proposal that cuts taxes for the rich at the expense of everyone else.”
Under the GOP plan, the corporate tax rate is cut to 20 percent, which is the average for the rest of the Organization for Economic Co-operation and Development. Former President Bill Clinton proposed cutting it to around 20 percent in order for the U.S. to be more competitive.