The GOP’s big tax-cut deal is bad news for middle class
- by admin
The GOP tax-reform package is bad for middle-class families, the White House said Tuesday, while Senate Republicans are working to undo some of the party’s biggest concessions.
The GOP bill would raise taxes on households earning $400,000 and more, as well as businesses with incomes above $1 million, the House passed its version Tuesday.
The House bill would repeal a $500,000 exemption for parents with children under age 6.
And the Senate bill would keep the $1,000 child tax credit but eliminate the $500 exemption.
The White House, however, would not say whether the tax-bill bill would be more progressive than the House.
“The bill that we’re working on today is the largest tax cut that we’ve seen in decades, and the largest cut in the history of the United States,” White House press secretary Kevin Lewis said.
“It is also one of the largest cuts in the past two decades.”
The White, House, Senate and House Ways and Means committees are working on a tax-and-spend plan, and lawmakers have until March 31 to produce a final version.
House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell have been negotiating with Senate Majority Whip Dick Durbin (D-Ill.) and other top Senate Republicans for months about the next steps.
The Senate bill includes several tax breaks that would benefit wealthy households, including the child tax break, which has been the main sticking point in negotiations.
The bill would also end the $600 child credit, which is tied to the income of taxpayers, and would cut taxes on the middle class and businesses.
“There are a lot of tax breaks, many of them middle-income-rich ones, that could benefit the middle- and working-class American families,” Lewis said, noting that the House bill “includes a lot” of those.
The proposal would also give the top tax rate on households above $200,000 a 25 percent cut.
The deduction for state and local taxes would be reduced from 10 percent to 5 percent, while the tax on business income would be repealed entirely.
A proposal that would have given some small businesses more leeway to deduct costs of advertising and other costs from the standard deduction was withdrawn because it would have helped some people at the bottom of the income distribution, and it would also have hurt middle-and working-income families.
Democrats have said the GOP tax plan would hurt the middle and working class.
The measure would eliminate a tax break for home mortgage interest and other interest, and increase the child-tax credit by $1.9 million, and raise the child credit for children ages 1 to 4 from $1 to $2,500.
Democrats argue that the tax changes would increase the federal deficit, while Republicans argue that they will help the middle, working class and small businesses.
The Senate version of the tax bill passed the Senate Tuesday on a 217-205 vote.
It now heads to the House, where lawmakers are expected to finalize the bill in the coming weeks.
The legislation would also eliminate the mortgage interest deduction, eliminate the tax break on interest paid on student loans, repeal the estate tax and the Alternative Minimum Tax.
The Republicans have vowed to eliminate all the deductions that are popular with wealthy households.
“This is the first time we’re ever going to get a bill that is not going to hurt the rich,” House Majority Leader Kevin McCarthy (R-Calif.) said at a press conference Tuesday.
“We’re not going away.
We’re not doing anything that hurts the middle or the working class.”
The GOP tax-reform package is bad for middle-class families, the White House said Tuesday, while Senate Republicans are working to…