The new Republican tax plan is not everything it claims to be. It is easy for our members of Congress to claim that this plan will benefit the middle class, but that couldn’t be further from the truth. The plan offers the biggest benefits to billionaires and giant corporations, while providing little relief if not eventually higher taxes for the middle class.
Federal revenue will be reduced by $2.4 trillion without a clear accounting for how this reduction won’t directly translate into increasing our national debt by the same amount. Decreasing the burden of taxes on the 1 percent and giant corporations does not translate into increased economic activity and production by the middle class. By 2027, the top 1 percent of Americans will receive 80 percent of the benefits this tax plan can provide, and the middle class will receive only about 5 percent of potential benefits. Further, one in four middle class families will pay higher taxes over the next decade under this bill. This country depends on the spending power of the middle class but this bill is only going to make it harder for ordinary Americans to be able to buy a home or send their kids to college.
The way this bill is structured doesn’t even try to hide its preferential benefits to the most affluent. Consider that the abolition of the estate tax, one of the features in the Republican tax plan. Not a single middle class family in America is impacted by the estate tax, as it currently allows for heirs to inherit up to $5 million tax-free. The drafters of the new tax plan must think this is too much of a burden on the ultra-wealthy, and $5 million tax-free is not enough. This bill would allow over $11 million to be passed on tax free — how many people do you know with that kind of wealth?
Republicans and Democrats can all agree that our tax code needs to be simplified, and part of this plan aims to do exactly that. Instead of having seven tax brackets there would be four, requiring income levels to be either moved up to a higher tax bracket or down to a lower tax bracket. Very low income earners will now be bracketed with low-middle income earners, effectively raising the rate for the poorest taxpayers. Simply put, the winners in this tax plan will be large businesses, multinational corporations, hedge funds and the richest among us like Donald Trump and his family. And the losers? Charities, universities, and the American middle class. We need Congress to take time to fully evaluate the effects this tax plan will have on Americans everywhere and to heed advice from leading economists on not only the short term, but also the long term consequences of these changes that would impact our country for generations to come.
Karen McCormick, DVM, is a 23-year resident of Longmont and a 2018 candidate for 4th Congress District.