Analysis: Senate measure would hike taxes for 13.8M
WASHINGTON (AP) — Promoted as needed relief for the middle class, the Senate Republican tax overhaul actually would increase taxes for millions of moderate-income American households, a bipartisan analysis showed Monday.
The assessment by Congress’ nonpartisan Joint Committee on Taxation emerged as the Senate’s tax-writing committee was set to begin wading through the measure Monday afternoon, working toward the first major revamp of the tax system in some 30 years.
Barging into the carefully calibrated work House and Senate Republicans have done, President Donald Trump called for a steeper tax cut for wealthy Americans and pressed GOP leaders to add a contentious health care change to the already complex mix.
Trump commended GOP leaders for getting the tax legislation closer to passage in recent weeks in a tweet and then added, “Cut top rate to 35% w/all of the rest going to middle income cuts?”
That puts him at odds with the House legislation that leaves the top rate at 39.6 percent and the Senate bill as written, with the top rate at 38.5 percent.
Trump also said, “Now how about ending the unfair & highly unpopular individual mandate in (Obama)care and reducing taxes even further?”
The legislation would deeply cut corporate taxes, double the standard deduction used by most Americans and limit or repeal completely the federal deduction for state and local property, income and sales taxes. Neither bill includes a repeal of the Affordable Care Act’s requirement that Americans get health insurance or face a penalty.
Trump and the Republicans have promoted the legislation as a boon to the middle class, bringing tax relief to people with moderate incomes and boosting the economy to create new jobs.
Yet, the congressional analysis found the Senate measure actually would increase taxes in 2019 for 13.8 million households earning less than $200,000 a year. That group, about 10 percent of all taxpayers, would face tax increases of $100 to $500 in 2019. There also would be increases greater than $500 for a number of taxpayers, especially those with incomes between $75,000 and $200,000. By 2025, 21.4 million households would have steeper tax bills.
The analysts previously found a similar magnitude of tax increases under the House bill.