Republican House Tax Plan Presentation to Government Accountability Task Force November 2017
Impacts of tax plan • Impact on middle class
• Personal exemption eliminated ($4050/person) • Itemized deduction for medical expenses, state and local income tax, college loan interest eliminated • Limits placed on mortgage interest and state and local real estate tax • Many people will use standard deduction because of loss of deductions • For a family of four, elimination of personal exemption wipes out standardized deduction gains • People with college loans or high medical expenses, state or local income tax, property values) will achieve no or very small reductions
• Upper income • • • •
Elimination of Alternative Minimum Tax (benefits people with $200K+ taxable income) Elimination of estate tax (benefits people with $12M+ in unsheltered estate) Reduction of corporate tax (benefits flow to management and shareholders Bracket reduction will generate tens of thousands (or more) in tax savings
The new story from the GOP • Tax cuts will bring jobs back, promote investments • Tax savings will be shared with employees • Result will be $4000 increase in income per family
• Economic growth will lead to balanced budget • In reality: • Companies are already awash in cheap cash • Tax rates seldom drive companies overseas • Tax savings go to shareholders, not employees
Broad effects • Few tax savings for middle class/huge savings for wealthy • $150 billion (at least) annual increase in deficit • Pressure for spending cuts (especially Social Security/ Medicare/-‐aid) • Budget resolution calls for $1.5T cut in Medicare/Medicaid • Longterm outline calls for continuing defense increases/non-‐defense cuts
• Toomey and Perry should be pressured on the deficit impact of tax proposal