GOP tax cut plan will help richest Americans, not the middle class
Recently, Gov. Tom Wolf sent a letter to Representative Pat Meehan urging him to oppose the federal tax overhaul proposed by Congressional Republicans.
In rejecting this advice, Mr. Meehan’s office said that the “average middleclass” taxpayer in the 7th district would see a $5,100 tax cut under the bill. This would be a compelling argument if it were in any sense true. Sadly, it’s not.
Mr. Meehan cited no source for his $5,100 figure, an unfortunate omission given that I could find no source for it. There is no support for this assertion from any reputable, historically neutral source.
The non-partisan Tax Policy Center (TPC) says that the plan would give the top 1 percent a tax cut of $207,000, but a middle-class family would receive an average cut of $300, about 92 percent less than what Mr. Meehan claims.
Congress’s non-partisan Joint Committee on Taxation says the average tax cut for a family earning $60,000 would be $720, while a family earning $10,000,000 each year would get a cut of over $260,000. On average, the after-tax incomes of the 95 percent poorest taxpayers would increase between 0.5 percent to 1.2 percent, according to TPC. But the incomes of the richest 1 percent would increase an average of 8.5 percent, meaning they would receive half of all the tax cuts in the new tax plan.
There are many similar sources of analysis, and all of them show that the average working family receives only a tiny percentage of the cut Mr. Meehan claims. But that’s not the end of the story. It’s actually far worse.
The key word in all of these estimates is “average.” The average is calculated by dividing the total amount saved nationally by the number of people in the category being analyzed. So, if the “average” middle class family is saving $300, that means many of those families are actually saving less, and in some cases, far less.
Because the GOP plan eliminates deductions for state and local taxes, medical expenses, and student loan payments, some taxpayers actually wind up paying more under the GOP plan than they do now. A analysis finds that almost a quarter of middle-class taxpayers will pay more within the next eight years. Both Speaker Ryan and Majority Leader McConnell have admitted that “some” middle-class taxpayers will pay more under their proposal.
And again, as bad as these numbers are, the story continues to get worse. The tax plan ends certain tax deductions that are particularly helpful to those of us living in Pennsylvania. Northern industrial states like ours will be slammed by the loss of state and local tax deductions. And the relatively high value of property in southeastern Pennsylvania will make the new cap on the mortgage interest deduction very painful for our area.
The bottom line is that the plan Mr. Meehan defends will benefit a few of his wealthiest constituents a lot. But most Americans, and most of us in southeastern Pennsylvania, will receive either negligible savings or dramatic tax increases. And in service of what? According to the Congressional Budget Office, this bill will add $1.7 trillion to our national debt over a decade, in addition to making it harder to afford college or pay for health care. All to drastically cut taxes, one more time, for big corporations and the richest Americans.
America currently has the highest level of income and wealth inequality in almost a century. The three wealthiest Americans are now wealthier than the bottom half of our entire population. Is eliminating deductions that working families rely on in order to give the richest people yet another massive tax cut really our highest priority?
There are many better alternatives. It’s probably not a good idea to add $1.7 trillion dollars to the national debt. But if we are going to do that, why not use that money to invest in repairing our infrastructure, which would help our economy grow and create millions of good-paying jobs? We could also use the money to make higher education more affordable or close tax loopholes that pay corporations to move jobs overseas. Is giving more money to the Koch brothers the best use of national resources?
This is a bad deal for the people of Pennsylvania. That’s why many of our federal representatives, including Rep. Brendan Boyle, D-13, and Rep. Dwight Evans, D-2, have rejected the plan. Rep. Meehan should follow the governor’s advice. over 13,000 voter signatures on a petition to have our Pennsylvania Legislature create a Citizen Commission to create sensible Congressional districts. Not bad for a rainy Tuesday in November.
We can hope that lasting engagement and reform can take place in our public service. Thank you.