Investor’s Business Daily posted an article yesterday detailing the tax cuts under the Senate Tax Bill currently being considered.
The article takes on some of the fiction about the bill currently being reported:
The Senate tax bill would reduce income taxes for people at every income level — even those who don’t pay taxes. That’s the official conclusion of the Joint Committee on Taxation. So why are Monday’s headlines screaming that the tax cuts would make the poor much worse off?
“Senate GOP tax bill hurts the poor more than originally thought, CBO finds.” That’s the headline in the Washington Post describing a Congressional Budget Office report released on Sunday.
The story claims that the “Republican tax plan gives substantial tax cuts and benefits to Americans earning more than $100,000 a year, while the nation’s poorest would be worse off.” Later, the Post story talks about the bill’s “harsh impact on the poor.”
The article explains why that story is false:
First of all, the CBO doesn’t describe the Senate bill as being “harsh” to the poor. That’s the spin put on by the reporter.
The report does, however, include a table that shows how the bill would affect federal revenues and spending by income group. And, indeed, it appears to indicate that those making less than $40,000 will take it on the chin, while those making more than $100,000 make out like bandits.
But note the word “spending” above. Since this is a tax-cut bill, why is “spending” part of the calculation at all?
That’s in there because the CBO includes the spending impact of the Senate bill’s repeal of ObamaCare’s individual mandate.
The CBO numbers assume that if the mandate is gone, people will drop their insurance. It does not consider the fact that many people pay the fine rather than the high cost of insurance. The tax bill returns the freedom to consumers to make their own choices about health coverage.
The article also includes a chart of tax savings (looking only at the tax cuts and savings in the tax bill):
If the tax cuts are passed, we can expect economic growth to return to our previous normal of about 3% (or more). We can expect people to leave welfare and join the work force because of a booming economy that results in higher wages. If the tax cuts fail, we can expect a Democratic Congress that will raise taxes, slow economic growth, and spend its time trying to impeach President Trump. It’s up to Congress to make the choice.