Who gets hurt by proposed Cut Cut Cut Act? Most of us

According to news reports, Donald Trump wanted the House Republican tax “reform” bill to be called the Cut Cut Cut Act. Alas, he didn’t get his wish, and it was instead given a boring name nobody can remember. But there’s still time to change it! So let me propose, as one reader suggested, that it be renamed the Leona Helmsley Act, after the New York hotelier convicted of tax evasion, who famously declared that “only the little people pay taxes.”

That, after all, is the main thrust of the bill. It hugely favors the wealthy over the middle class, which is pretty much always true of Republican proposals. But it’s not just about favoring high incomes: It also systematically favors people who live off their assets, especially inherited wealth, over the little people — poor shlubs who actually have to work for a living.

Consider a few hypothetical taxpayers and how they would fare under the GOP bill.

First is the poster child family Paul Ryan keeps talking about, a family with two children making $59,000 a year. In the first year of the Cut Cut Cut Act, such a family would indeed receive a tax cut. But it comes from several special tax credits that are basically loss leaders to help sell the plan; they all either expire in later years or will get eroded by inflation. By 2027, with the plan fully phased in, that family would actually be facing a significant tax increase relative to current law.

Second, consider someone much further up the scale, but still works for a living. In the movie “Wall Street,” Gordon Gekko sneers at “a $400,000-a-year working Wall Street stiff flying first class and being comfortable.” What would happen to that guy? Well, if you ignore deductions, he’d end up paying a few hundred dollars less in taxes. But once you take lost deductions into account, especially for state and local taxes, he almost certainly ends up facing a tax hike, not a cut.

Doctors, lawyers, engineers, and other well-paid professionals would be in the same situation. Overall, the Tax Policy Center estimates that more than a quarter of the population would see taxes go up, not down, under the GOP proposal; for those with incomes between $200,000 and $500,000, that fraction rises to more than 40 percent.

Finally, let’s imagine a very lucky individual — let’s arbitrarily call him Eric Trump — who stands to inherit a stake in a business he doesn’t run, plus a bunch of stock. He’ll get his inheritance tax-free, because the estate tax gets phased out in the GOP bill. He’ll get to pay a low tax rate on his business income. And his stocks will pay higher dividends, because the GOP bill also sharply cuts corporate tax rates, and most of the benefit of those cuts will probably flow to shareholders.

So when Gary Cohn, Trump’s top economic adviser, says the bill’s goal is “to deliver middle-class tax cuts to the hardworking families in this country,” he’s claiming that up is down and black is white. This bill does little or nothing for the middle class, and even among the affluent it’s biased against those who work hard in favor of the idle rich.

How will Republicans get away with this? First, they will lie, unashamedly, about what their bill actually does. Second, they will try to distract working-class voters by stoking racial animosity. That didn’t work too well in Tuesday’s elections, but they’ll keep on trying.