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House GOP Release Another Round of Proposed Tax Cuts
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11 Sep 2018 04:12 PM EST

By Laura Tucker, Staff writer; Image: Tax and the American flag (Image source: Public domain)

 

 

House Republicans, possibly fearing that they will lose control of the House in the November midterm elections are trying to push out a second round of tax cuts, with the first round falling late last year. But these cuts could add more that $2 trillion to the federal deficit over a decade, or the total worth of Apple and Amazon together. 

The plan for "tax reform 2.0" is to make the tax cuts for individuals that Donald Trump signed into law last year permanent. This includes temporary reductions in the rate individual filers pay and the Child Tax Credit being doubled. It also includes cuts to the estate tax paid by a few of the wealthiest families.

 

The plan's critics believe these changes will primarily benefit the wealthiest taxpayers, but the GOP feel otherwise, that these tax cuts will help the U.S. economy by leaving people with more money. 

The proposal will require 60 votes in the Senate, so it's not expected to pass Congress this year. The plan was released by Rep. Kevin Brady (R-TX), chairman of the House Ways and Means Committee and behind last fall's tax cuts, and it's already received negative marks from Democrats.

 

The tax cuts for individuals under previous Republican tax law will expire in 2025, as lawmakers decided to only put the tax changes for corporations on the books permanently.  

Nearly a decade was given to Congress to extend the individual tax cuts before the expiration date, but with the outlook for the House GOP in the midterms, they see their time running out. Democratic candidates see the law as benefiting large corporations, so Republican lawmakers want to show how individuals could benefit as well.

 

"Last year we said goodbye to America's old, broken tax code," said Brady in a news release. "Now it's the time to ensure we never let our tax code become so outdated again." 

The other big negative to this tax plan is the price. It will add about $630 billion to the federal deficit in ten years and will also cost $1.9 trillion with higher interest payments said the Joint Committee on Taxation.

 

And that's just the beginning. The Tax Foundation predicts in 2026 the cuts could cost the government about $165 billion annually, comparing the amount to today's dollar. Additionally, they found that annually the tax cuts would add $2.4 trillion to the federal deficit over the next ten years. 

The Center for Budget and Policy Priorities estimates the plan could cost $2.9 trillion in the decade after it's enacted. From 2029 to 2038 they believe the cost could get to as high as $3.4 million. But all these projections were made before Brady officially released the plan.

 

A House Republican aide stated that White House officials and the Treasury Department added their own input into the plan. The committee will consider the plan later this week and may vote on it this month still. 

But Democrats have the votes in the Senate to prevent this tax plan from going into law. Democratic Senators from "red" states voted against the law that was passed last December, and Senate Majority Leader Mitch McConnell isn't expected to even put this up for a vote.

 

The Democrats believe this proposed plan will punish the middle class as well as the poor and that it will allow more spending cuts to be made at a later date to entitlement programs that help senior citizens. 

The richest one percent of taxpayers would get on average a tax cut of $24,130, compared to the $460 average tax cut for the bottom 60 percent of taxpayers, according to the Institute on Taxation and Economic Policy.

 

"Republicans' first tax law raised taxes on middle-class families, hiked health care costs for millions and showered the most well-off and well-connected with massive tax cuts," reported Rep. Richard E. Neal (D-MA), the House Ways and Means Committee's top Democrat. 

"This tax legislation won't help workers and families, but it will further enrich GOP donors and provide Republicans with more ammunition to attack programs like Medicare and Social Security."

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