GOP Leaders: Tax Plan Is Cut For the Middle Class

Washington Post

Republican leaders on Sunday were unable to guarantee tax cuts for all middle-class workers as a part of a tax plan that GOP leaders have pledged to produce by the end of the year.

House Speaker Paul Ryan, R-Wis., and Treasury Secretary Steven Mnuchin defended the newly released GOP tax plan as a boon for the middle class amid accusations from Democrats and some outside groups that it is primarily a chance to cut taxes on corporations and the wealthy. The pair argued that such accusations are based on faulty information and lack of details.

“The entire purpose of this is to lower middle-class taxes,” Ryan said in an interview on CBS’ Face the Nation. “So yes, people are going to get tax cuts. How big are those tax cuts? That depends on the individual.”

Ryan’s explanation is part of a broader attempt to build support for a tax proposal that is viewed by many in the GOP as the only chance to pass any major legislative priorities this year. Republican leaders are under intense pressure from voters and President Donald Trump to fulfill their pledge on taxes after the dramatic failure of their promises to repeal and replace the Affordable Care Act.

But GOP leaders are already battling criticism from outside groups and Democrats who say top earners stand to benefit most from the tax cuts included in last week’s outline. They also face concerns from within their own party that the cuts would explode the deficit.

Ryan rejected those concerns Sunday, saying middle-class families are the motivating force behind the tax overhaul plan. He said middle-income families will benefit from plans to double the standard deduction, expand some existing credits and maintain breaks on mortgage interest and charitable giving.

“Those are all middle-class tax things,” Ryan said. “The purpose of this is to help people who are living by a paycheck keep more of their own hard-earned money but also get more jobs, a faster-growing economy.”

Many critical details, such as which income groups will pay which rates, were left out of the nine-page framework released last week, raising concerns that high-income earners and corporations could see disproportionate benefits under the plan. Republican leaders have asked congressional tax writers to fill in the details.

But Democrats and some outside groups say the outline favors top earners over the middle class. A study released Friday by the nonprofit Tax Policy Center found that the top 1 percent of earners would see nearly 80 percent of the benefits under the GOP tax plan while people earning between $150,000 and $300,000 would see a slight tax increase.

The report also estimates that wealthy earners would disproportionately benefit from the plan. Analysts point to plans to cut the top tax rate from 39.6 percent to 35 percent, eliminate estate and alternative minimum taxes and cut rates on small businesses as clear benefits for the rich.

Top administration officials, including Mnuchin, White House economics adviser Gary Cohn and White House budget director Mick Mulvaney made roughly a half-dozen television appearances Sunday in support of the plan. Each argued that the Tax Policy Center analysis was based on too little information and that the aim is to cut taxes for the middle class, not the wealthy.

Mnuchin rejected the study’s findings in an interview on ABC’s This Week, saying the estimated benefits for the top 1 percent were “not a fact.”

“I just don’t think that’s the case,” Mnuchin said. “As we’ve talked about, changes in the top bracket are offset with elimination of almost every single type of deduction.”

Republican leaders say middle earners will also benefit from economic growth that could result from a tax overhaul. Mnuchin said cutting the top corporate tax rate from 35 percent to 20 percent and cutting taxes on small businesses will create economic growth of 3 percent or higher – a significant increase over the 2.6 percent growth recorded between April and June of this year.

But even some Republicans say that kind of growth is unlikely. Sen. Bob Corker, R-Tenn., said he is cautious about the growth estimates that leaders have discussed. He said he is eager to begin a serious tax discussion, but he insisted that he will not vote for any bill that adds “one penny to the deficit.”

“I am not going to be for it, OK?” Corker said on NBC’s Meet the Press. ” I’m sorry. It is the greatest threat to our nation.”

Corker’s vote could be critical to ensuring the legislation can pass in the Senate, where the GOP controls 51 out of 100 seats. Republican leaders plan to take advantage of special Senate budget rules that would allow them to pass the tax bill with a simple majority of 51 votes, but no Democrats are expected to vote for the legislation.

Senate Minority Leader Charles Schumer, D-N.Y., said in a Sunday interview on Face the Nation that Democrats refuse to support a GOP-written tax bill that adds to the deficit while cutting taxes on the wealthy.

“We want to work with them if they will change,” Schumer said. “They can’t just put down a plan and say, ‘Bipartisanship is you guys come over and do what we want,’ when it’s against our principles.”