Bill would raise taxes on 13.8 million households
Promoted as needed relief for the middle class, the Senate Republican tax overhaul actually would increase taxes for some 13.8 million 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 that 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’s latest tweet injected a dose of uncertainty into the process as the Republicans try to deliver on his top legislative priority. He commended GOP leaders for getting the tax legislation closer to passage in recent weeks and then said, “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?”
Overall, 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. It carries high political stakes for Trump and Republican leaders in Congress, who view passage of tax cuts as critical to the GOP preserving its majorities at the polls next year.
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.
Senate Majority Leader Mitch McConnell, R-Ky., asked whether the Senate’s proposed repeal of the property tax deduction could bring higher taxes for some middle-class Americans, acknowledged there would be some taxpayers who end up with higher tax bills.
“Any way you cut it, there is a possibility that some taxpayers would get a higher rate,” McConnell told reporter at a forum in Louisville, Ky., with local business owners and employees. “You can’t craft any tax bill that guarantees that every single taxpayer in America gets a tax break. What I’m telling you is the overall majority of taxpayers in every bracket would get relief.”