Tax plan claim ignores details

North Carolina Gov. Roy Cooper, a Democrat, recently criticized House and Senate efforts to cut taxes, saying they overwhelmingly favor groups that need help the least — large corporations and millionaires.

Cooper said Congress’ efforts seem “eerily familiar” in his state.

“Unfortunately, decisions made by the Republican state legislature have left too many middle class families out of our state’s economic growth,” Cooper wrote in a Nov. 30 op-ed published on Medium.com. “Those decisions rigged the system to let those at the top reap most of the rewards.”

Congressional Republicans, he said, are charting the same course.

“In total, it is estimated that half of the tax breaks in this proposal would go to the wealthiest 1%,” Cooper wrote. “The Joint Committee on Taxation shows that, on average, taxpayers earning $75,000 or less would end up paying more in taxes.”

A recent fact check shows that Cooper is partly right about taxpayers who earn less than $75,000 a year, but he left out the fact that most Americans would get a tax cut initially. Experts say that by 2027, the Senate plan will leave them paying more in taxes, barring further changes in law.

There are two tax plans being considered right now: a Senate

The plan changes by year

PolitiFact reached out to Cooper for clarification. Ford Porter, his spokesman, cited analyses of each plan by the nonpartisan Urban InstituteBrookings Institution Tax Policy Center.

The Tax Policy Center found that the Senate plan gives 61.8% of the tax cuts to the top 1% “once the cuts are phased in,” Porter said.

“Their analysis of the House bill showed 47% (of the cuts) going to the top 1%,” he added.

Porter is right. But key words to consider are “once the cuts are phased in.”

The report shows that estimates don’t bear out Cooper’s claim until 2027, because that’s when many of the deductions for lower-income Americans are phased out.

In 2019, the center says the top 1% would get 17.6% of the Senate plan’s total federal tax change, a share that would rise to 22% in 2025.

Change, in dollars

What does that look like in financial terms? The Tax Foundation is a conservative-leaning nonprofit organization that examines the link between tax policies and the economy.

The foundation found that, under the Senate plan, the bottom 80% of taxpayers would initially keep 1.1% to 1.9% more of their income. America’s wealthiest — the one-percenters — would initially keep about 7.5% more of their money because of cuts to the corporate tax rate, as well as the income tax rate.

By 2027, things change for the bottom 80% of taxpayers. The foundation estimates they’ll keep just 0.3% to 0.4% more. The top 1%, however, would keep 4.5% more compared to today’s rates.

The Tax Policy Center has a similar analysis. The center says that in 2019, the Senate plan would cut taxes by an average of $900 for taxpayers earning between $50,000 and $87,000 a year. The average tax

cut for the top 1% would be $34,000.

The House bill similarly phases-out deductions for lower-income Americans, said Joe Rosenberg, senior research associate for the center. In the House bill, for example, “there’s a $300 child and family credit that expires after five years at the end of 2022. That would be for a family of four a $1,200 tax credit,” Rosenberg said.

By 2027, the analysis says those middle-income taxpayers would get cuts of less than 0.1% while the average “one-percenters” would still enjoy taxes that are 1.4% lower than they are right now.

Our rating

Cooper said half of the tax breaks in Senate Republicans’ proposal would go to the wealthiest 1% of Americans. If key changes in the plan remain temporary, Cooper’s claim would come to fruition, but not for 10 years. Cooper’s op-ed doesn’t explain that change.

On balance, we rate his claim Half True.