Oops! GOP Leaders Admit New Plan Doesn't Cut Taxes for All

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Published: 13 Nov, 2017
Updated: 21 Nov, 2022
4 min read

Republican Senate Majority Leader Mitch McConnell (R-KY), one of the "Big Six" responsible for crafting the GOP's comprehensive tax reform bill admitted to the New York Times Friday that the tax reform plan underway will raise taxes on some middle class Americans, claiming he "misspoke" when he recently said otherwise:

"I misspoke on that. You can't guarantee that absolutely no one sees a tax increase."

The Republican leader added that "what we are doing is targeting levels of income and looking at the average in those levels and the average will be tax relief for the average taxpayer in each of those segments."

This is exactly what libertarian Tea Party Republican Rand Paul (R-Ky.) warned about last month over the denials of McConnell and other Republican leaders, saying:

https://twitter.com/RandPaul/status/914928161498046464

Paul was basing his assessment on an analysis of the Republican tax plan by the Tax Policy Center. In the abstract of their analysis report, the TPC said:

"The Tax Policy Center has produced preliminary estimates of the potential impact of proposals included in the ‘Unified Framework for Fixing Our Broken Tax Code.’ We find they would reduce federal revenue by $2.4 trillion over ten years and $ 3.2 trillion over the second decade (not including any dynamic feedback). In 2018, all income groups would see their average taxes fall, but some taxpayers in each group would face tax increases. Those with the very highest incomes would receive the biggest tax cuts. The tax cuts are smaller as a percentage of income in 2027,and taxpayers in the 80th to 95th income percentiles would, on average, experience a tax increase."

David Bergstein, a spokesman for the Democratic Senatorial Campaign Committee, accused McConnell of lying about the GOP tax plan:

“The only thing that Mitch McConnell can guarantee is he’ll stop at nothing to make sure his donors are taken care of — even if it means lying about how his donor-driven policies will hurt middle class families."

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Senate Minority Leader Chuck Schumer (D-NY) piled on after McConnell's stunning admission, stating that middle class households "would be hammered" by the Republicans' tax plan, adding:

"The Senate bill clearly violates Leader McConnell’s pledge that the Republican plan wouldn’t raise taxes on the middle class. Rather than distorting the facts about their plan, Republicans should turn back and work with Democrats on a bipartisan plan."

The comments McConnell has been forced to walk back as misspoken after the unveiling of the Senate GOP tax reform bill last week were his remarks to conservative talk radio host, Hugh Hewitt, earlier this month, guaranteeing over warnings from Republicans like Rand Paul that "at the end of the day, nobody in the middle class is going to get a tax increase."

A New York Times analysis of the tax bill found this to be far from the case:

"Both the House and Senate bills would cut the corporate tax rate to 20 percent from 35 percent and provide business tax benefits, such as the ability to immediately expense purchases of equipment.

The Times analysis, using the open-source software TaxBrain, found that roughly one-quarter of families in the middle class would see their taxes increase in 2018, by about $1,000 on average. By 2026, the share seeing an increase would rise slightly, to about one-third, and the average increase would rise to about $1,600. For the majority of middle-class families that receive a tax cut, the average savings would be about $1,300 in 2018 and $1,700 in 2026.

The Times analysis defines the middle class broadly as those earning between two-thirds and twice the median household income, or about $50,000 to $160,000 per year for a family of three. To focus on families, the analysis excluded individual filers and households headed by people 65 or older and is adjusted for the size of each household.

Under the House bill, The Times has found, about half of middle-class families would pay more in taxes in 2026."

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AshLee Strong, a spokesperson for House Speaker Paul Ryan (R-Wis.), told the Washington Post on Thursday that the speaker misspoke when he said everyone would get a tax cut. Ryan is now using more qualified language to discuss the scope of the House tax bill's cuts: "average households at every income level see a tax cut."

Independent Republican Rand Paul’s own tax reform plan, called “The Flat and Fair Tax,” would eliminate all tax brackets and guarantee every American a tax cut, taxing all income at the same rate of 14.5 percent. That includes wages and salaries, capital gains, dividends, interest, and rents.

A Tax Foundation analysis of the Flat and Fair Tax estimates Paul’s plan would cut $1.8 trillion of federal revenue from taxes before considering dynamic feedback due to the economic effects of the plan, but raise $737 billion in federal revenue by stimulating economic growth.

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