Rep. Kevin Brady (R-Texas), shown here flanked by other Republican leaders, unveiled his party’s “tax cuts 2.0” package on Tuesday. (Photo: Alex Wong/Getty Images)
Despite the profound unpopularity of the Republican Party’s tax law, party leaders on Tuesday unveiled framework for their “tax cuts 2.0” package.
By Julia Conley / 07.24.2018
Despite the profound unpopularity of the Republican Party’s tax law, pushed through last December amid loud protests directed at President Donald Trump and GOP lawmakers, party leaders on Tuesday unveiled framework for their “tax cuts 2.0” package—signaling that they are doubling down on their plans to benefit the rich at the expense of working Americans.
American wages on average are down 9.3% since the GOP #TaxScam went into effect in January, with big savings for corporations and billionaires. So of course House Republicans want to… cut more taxes. https://t.co/TK5Nnv1go9
— Swing Left (@swingleft) July 24, 2018
— Media Matters (@mmfa) July 24, 2018
The framework, which House Ways and Means Committee Chairman Kevin Brady (R-Texas) released, claims that it would permanently extend tax cuts for individuals that were set to expire in 2025, help families to save for college, and help small businesses create retirement plans for their workers.
The plan will “build on the growing successes of the Tax Cuts and Jobs Act and ensure this energized economy continues moving forward,” said Brady.
Critics pushed back against the notion that the Republican tax law has “energized” the economy and created “successes” to build on.
“The new line from Republicans in Congress is that Americans are ‘better off’ because of last year’s tax cut, so we have to extend it,” said Morris Pearl, a former managing director at Blackrock and chair of Patriotic Millionaires. “Well, some Americans are better off—people like me who are wealthy enough to not need work—but most Americans are still struggling. The first round of tax cuts was overwhelmingly skewed towards rewarding wealthy GOP donors rather than helping the middle class, and this second pass will be just as bad.”
As Brady, House Speaker Paul Ryan (R-Wis.), and Trump did last fall as they promoted their earlier tax plan, the framework released on Tuesday portrays the proposal as being beneficial for working Americans, with promises of “family-friendly savings plans” and the ability to grow “brand-new entrepreneurs.”
But most benefits of the law that Republicans passed last winter have been shown to go to corporations and the wealthiest Americans, with the Center on Budget and Policy Priorities (CBPP) showing that “a third of the benefits from corporate rate cuts will ultimately flow to the top 1 percent of households, not ordinary workers.”
“The new law will increase income inequality since it delivers far larger tax cuts to households at the top, as a share of income, than those at the bottom or middle,” wrote CBPP in April.
The GOP’s promises that companies would boost hiring and salaries after receiving their tax cuts have been proven categorically false since the beginning of the year, with just six percent of companies’ windfall going to employees’ wages and the vast majority rewarding wealthy shareholders.
In April, more than half of those polled by Politico/Morning Consult reported that they had not seen a boost in their pay since the tax plan was passed.
The new framework, said Pearl, is likely to further line the pockets of wealthy corporations.
“The Tax Cuts and Jobs Act led to more money being funneled into the bank accounts of the ultra-rich while worker wages actually dropped, and there’s no reason for us to expect anything else from Tax ‘Reform’ 2.0.,” he said. “The framework says it expects GDP to increase by 2.2 percent, yet they only project wages to increase by 0.9 percent—even in their absolute most optimistic framing, they still admit that less than half the benefits of their bill will go to workers.”
As Bloomberg News reported, the plan also omits a provision that would have allowed victims of sexual harassment to write off their legal costs. As Republicans plan to use the framework as a talking point heading into the midterm elections, the omission may not be corrected until after November, if at all.