Now that ACA repeal is dead, at least for the moment, Republicans claim they will move on to tax cuts. I am skeptical. While all Republicans support giving more money to the 1%, the devil is in the details. As we move closer to the midterms, this gets even harder. In any case, Republicans are already trying to sell this plan through their usual tactic of bald-facing lying about the middle class.
In selling their soon-to-be-released tax plan, Republicans have been leaning hard on what they say is a provision to cut and simplify taxes for the middle class: Doubling the standard deduction that income tax payers may take.
“You have to look at the plan in its entirety. It doubles the standard deduction, so in the end, even the lowest rates get a tax cut,” Rep. Jim Renacci, a Republican who sits on the tax-writing Ways and Means Committee, told Reuters.
But a document published by Jonathan Swan of Axios shows this is badly misleading. The plan would increase the standardized deductions available to taxpayers by 15% or less.
Meanwhile, taxpayers who still wouldn’t take the standard deduction under the Republican plan — those who would instead deduct things like mortgage interest — would pay tax on more of their income than they do now.
Here’s the important fine print: “To simplify the tax rules, the additional standard deduction and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction.”
Meanwhile, taxpayers who itemize their tax deductions for things like mortgage interest and state and local taxes would pay tax on more of their income on the Republican plan. The Republican proposal says “most” itemized deductions would be abolished anyway, but those for mortgage interest and charitable giving would be retained.
Currently, you get to take the personal exemption even if you also itemize deductions, but you only get to take the standard deduction if you forego itemize deductions. Combining these provisions into a single, standard deduction would mean itemizers lose their personal exemption and get nothing back — meaning they’ll typically pay tax on an extra $4,050 of income if they’re single, or $8,100 if they’re married.
In other words, Republicans can throw out some numbers that make it sound like the middle class will receive a tax cut but in reality, they will be paying more in taxes. All of this to cover up the real goal–giving enormous tax cuts to Republican donors, their only actual consistency at this time.