Report: Tax Plan Would Raise Taxes On Middle Class

Author:
Publish date:
Updated on
Report: Tax Plan Would Raise Taxes On Middle Class Promo Image

A congressional analysis has found that Senate Republicans' proposals to change the tax code would result in tax increases for Americans who make $75,000 or less over the course of a decade. Senate Republicans have disputed the report's findings.

On Nov. 16, the nonpartisan Joint Committee on Taxation released its analysis of the GOP Senate tax plan, titled the the Tax Cuts and Jobs Act. The Republican legislation would repeal the Affordable Care Act's individual mandate, temporarily cut individual taxes until 2025, and permanently slash the corporate tax rate.

The JCT analysis found estimated that the TCJA would cut individual taxes by 7.4 percent in 2019. Americans making between $75,000 and $100,000 that year would receive a 7.7 percent cut. Those making $1 million or more would see their taxes trimmed by 5.4 percent, Politico reports.

By 2027, Americans who make $75,000 or less per year would pay higher taxes than they do today. Americans who make between $20,000 and $30,000 would pay 25 percent more in taxes. Those who make $100,000 or more would receive increasingly large cuts to their tax bill.

The JCT attributed the projected tax increases for the middle class and low-income Americans to the TCJA's proposal to repeal the ACA insurance mandate, the expiration of individual tax cuts, and a rearranging of the tax bracket to offset inflation.

Image placeholder title

On Nov. 8, the Congressional Budget Office estimated that repealing the ACA's individual mandate would result in 13 million fewer Americans being able to afford health coverage by 2027 and overall insurance premiums rising by an average 10 percent each year, according to CNN Money.

GOP Sen. Orrin Hatch of Utah, who spearheaded the TCJA, blasted the JCT's findings on the Senate floor. Hatch asserted that the report calculated tax increases on low-income Americans because its authors factored in decisions not to accept federal subsidies for health insurance as an tax burden.

"Anyone who says we're hiking taxes on low-income families is misstating the facts," Hatch said, according to The Washington Post. "Obviously we have no intention of raising taxes on those families. Every Republican on this committee has been committed to providing tax cuts for every income cohort."

GOP Sen. Mike Crapo of Idaho said that if low-income Americans decide not to buy health insurance, "there's not $1 taken away from them if they make that choice."

Image placeholder title

Democratic Sen. Ron Wyden of Oregon blasted the TCJA in light of the JCT analysis.

"What is happening now is just shameful," Wyden said. "I don't know how anybody can go home and explain why it's a good idea to hike taxes on parents who barely stay afloat to pay for a massive corporate handout."

On Nov. 15, a Quinnipiac University Poll found that 52 percent of registered voters disapproved of the Republican tax proposals while 25 percent approved.

In other poll data, 36 percent of respondents believed the GOP tax plans would not noticeably impact how much they paid in taxes, 36 percent predicted they would have to pay more and 16 percent expected a reduction in their tax bill, CNBC reports.

Sources: CNBC, CNN MoneyPoliticoThe Washington Post / Featured Image: CafeCredit.com/Flickr / Embedded Images: John Morgan/Flickr, The Salt Lake Tribune/Flickr

Popular Video