As we keep pointing out, the House bill, like its evil twin in our own backyard, would chop the income tax rate for top earners, and slash the top rate for “pass-through” income earned by them, too.
Newsflash from the Heartland: This won’t end well, GOP.
Just before the midday vote, House Speaker Paul Ryan rose to speak and got the first of several extended ovations. “I haven’t said anything yet,’’ he said, laughing. “This is great.”
No, it isn’t, because most Americans would not be popping open the champagne if anything like this legislation became law.
Eighty percent of its cuts would go to businesses and to families — like the president’s, for example — who are so wealthy they would benefit from a provision ending the estate tax. (Already, the first $5.49 million can be passed on tax-free, or almost $11 million if you leave a spouse behind.)
Taxes would initially go down for most other Americans, too, but that infusion of extra cash would dwindle over time. And many of those who itemize deductions, to write off high medical costs, for instance, would pay more than they do now.
The Senate is still working on its version of the tax bill, which is in trouble in part because it would, oh by the way, repeal the Affordable Care Act’s individual mandate. That would provide more money and lessen the impact of the $1.5 trillion in tax cuts on the national debt.
The nonpartisan Congressional Budget Office says this maneuver would also result in 13 million more Americans who are uninsured.
But it would not, of course, result in any change in the reality that the rest of us would still pay for the health care of the uninsured when they get sick and show up in the emergency room.
Republican Senator Susan Collins, of Maine, explained why this is a big problem.
“I am no fan of the individual mandate and I very much want to see tax reform,” she said. “But I believe taking a particular provision from the Affordable Care Act and appending it to the tax bill greatly complicates our efforts. One of my concerns is that it will cause premiums in the individual markets to go up as healthier, younger people drop out.”
According to the CBO, nixing the individual mandate would increase premiums about 10 percent. “For some middle-income people,” Collins said, that would “cancel out their tax cut. The increased premium would be more than the tax reduction they would get from this bill.”
The end of the individual mandate would be a permanent change, as would all of the corporate cuts, but for people, they’d be temporary. (Yeah, we know where we humans stand in this equation.)
The Senate version would also completely eliminate the deduction of state and local taxes, which is an especially controversial provision in high-tax states.
Just as in Kansas, Republicans argue that both the House and Senate bills are guaranteed to boost wages, create jobs and goose the economy. Senators, please don’t make us say we told you so.