New House Republican Tax Proposal Fails Fiscal Responsibility Test, While Favoring the Wealthiest

[ehrnst]

The House is expected to vote later this month on its “2.0” tax plan, a tax-cut bill that would double down on the 2017 tax law’s flaws by once again delivering substantially more to high-income households than to those with low and moderate incomes, adding considerably to the nation’s long-term fiscal challenges, and creating opportunities for tax avoidance by wealthy filers.[1] The centerpiece of this tax-cut package is the permanent extension of the 2017 tax law’s individual provisions that are slated to expire after 2025. The bill that House leaders bring to the floor for a vote may also include other provisions, though they will almost certainly be dwarfed by the outsized effects of continuing the 2017 tax law’s individual provisions. The permanent extension of those provisions would:

Ignore decades-long working-class wage stagnation and exacerbate income inequality by delivering more than double the after-tax income gain to households in the top 1 percent of the income spectrum than to households in the bottom 60 percent, according to Tax Policy Center estimates. Average after-tax incomes of the top 1 percent (those with incomes above $732,800 in 2018) would rise 2.2 percent, with an average tax cut of $32,650, while the incomes of the bottom 60 percent (those with incomes below $86,100) would rise by only 1 percent, with an average tax cut of $340. (See Figure 1.)

Aggravate the need for more revenue to address the nation’s fiscal challenges by delivering another unpaid-for tax cut. Extending the 2017 tax law’s individual provisions would cost $631 billion between 2019-2028, according to the Joint Committee on Taxation (JCT).[3] But this understates the fiscal damage; the estimate doesn’t show the true long-run costs because virtually all of these provisions would have effect only in the final years of the decade. By 2027, extending these provisions would cost about $250 billion a year, or more than 0.8 percent of GDP. These provisions would cost about $2.8 trillion in the first ten years after becoming permanent (2026-2035).

Risk undermining the integrity of the tax code by making permanent the 20 percent deduction for “pass-through income,” a provision that encourages tax gaming and avoidance schemes. The deduction — which is available to certain owners of businesses such as partnerships, S corporations, and sole proprietorships — creates a strong incentive for high-income individuals to recharacterize their wage and salary income as pass-through profits so they can take advantage of this tax break

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https://www.cbpp.org/research/federal-tax/new-house-republican-tax-proposal-fails-fiscal-responsibility-test-while

[ladjf]

1. Of course. What would you expect from the Republican "Mafia"? nt

[Andy823]

2. Once again

Help the rich, and to hell with everyone else! Voting this year is not an option, we have to get rid of as many of these greedy jerks as we can, in the house, an hopefully in the senate.

[Achilleaze]

3. Spank the repubes on their dainty diapered keesters for this

spank spank spank - republicans want MORE TAX CUTS FOR THE RICH - spank spank spank. Drum the spank home every frikking day till the election and beyond.

Hell, spank the republicans relentlessly on their climate change lies, as well. Republicans have weakened and endangered America with their ceaseless lies.

Spank the bejabbers out of them and their draft-dodging, casino-hustling, kremlin-fellating hurricane-incompetent, Creep-in-Chief (R).

[ehrnst]

5. Now that's an image I can't unsee... (nt)

[JHan]

4. kick*