Dems attack tax bill as ‘middle-class con job’

GOP insists cutting business taxes will bring wage gains.

Republicans will pitch their tax bill this week as a gift to the middle class, but Democrats will call it a Trojan horse: a windfall for big business and the rich dressed as a tax cut for workers.

The tensions over who will benefit from the sweeping tax rewrite were on display during an hourlong meeting last week between President Donald Trump and Senate Finance Committee members.

Democrats who attended, including many whose states Trump won, said the president agreed with every point raised on the subject of tax cuts for the middle class. At the end of the meeting, Sen. Ron Wyden, D-Ore., told Trump that the tax bill Republicans were drafting would not deliver on his promises to the middle class and would instead benefit corporations and high earners.

Trump looked at his top economic advisers, waved his hand, and said, “Take care of it,” Wyden recalled in an interview.

Democrats have little expectation Republican lawmakers will take heed when House lawmakers introduce their tax bill next week. And Wyden and other Democrats are not waiting: They are already attacking the legislation as a bait-andswitch in the hopes that they can find a path forward to a bipartisan tax bill that they believe will truly benefit middle-class Americans.

“This is a middle-class con job,” Wyden said.

Democrats hope that by killing the Republican bill, they can work with Trump to craft bipartisan legislation that achieves a middle-class tax cut.

Republicans are putting the middle class at the forefront of the discussion of their plan to pass the most sweeping rewrite of the tax code in a generation.

Their primary claim is that cutting taxes on businesses, including lowering the top corporate tax rate to 20 percent from 35 percent, will generate large wage gains for U.S. workers.

House Speaker Paul Ryan, R-Wis., told reporters Thursday that “the entire purpose of this tax bill is to cut middle-class taxes.”

But he warned earlier in the week that, to meet Democrats’ demands to avoid cutting taxes on corporations and wealthy individuals, “we would basically have to destroy the growth elements of this tax reform plan.”

Republicans argue that lowering the tax burden on businesses will generate economic growth to help offset the cost of the plan.

Crucial details of the House and Senate versions of the plan are still unknown, in part because Republicans are struggling with how to pay for the tax cuts they are envisioning. Lawmakers have cleared the way for a $1.5 trillion tax cut and now have to find a way to stuff the trillions of dollars of cuts they envision into that hole, by offsetting those cuts by ending tax breaks and employing accounting maneuvers to reduce their costs.

Many of the details still in flux are important because they would affect middle-class taxpayers directly, including the boundaries of income-tax brackets, the size of an expanded child tax credit and the fate of some deductions that Republicans had targeted for elimination, such as one for state and local taxes paid.

A framework for the plan, released by Republican leaders in September, calls for cutting corporate rates; nearly doubling the standard deduction for individuals and couples; reducing the number of individual income tax brackets to three or four, from seven; overhauling the way in which the U.S. taxes multinational corporations; and taxing “passthrough” entities, which are businesses whose owners pay taxes on profits through the individual tax code, at a rate of 25 percent.

Depending on how the details are filled in, such a tax bill could reduce income taxes on nearly all middle-class families — or it could raise them for millions of middle-class families, by eliminating deductions and other tax breaks and not reducing rates enough to make up for that.