Today, Senate Republicans will release their version of a tax bill, and while we don’t have all the details yet, we’ve learned that they want to delay the corporate tax cut to stay within the budget they’ve already passed. For now, we know much more about the House’s version, so let’s start with a new analysis of that bill released by the nonpartisan Tax Policy Center, which has lots of detail on exactly how many people will see their taxes go down and how many will see them go up.
We should note that even though the rich are the big winners — by 2027, the top 1 percent of income earners get nearly half the tax benefits — it’s also the case that since there are so many changes to so many different provisions, there are winners and losers at every level.
For the moment, let’s focus only on those who are going to lose. I used the TPC’s figures (from tables 3 and 4 here) to calculate numbers they didn’t detail specifically: exactly how many people’s taxes will go up if this bill is passed. And it’s a lot — a quarter of all households by 2027.
The following graph shows the number of households in each income quintile that will see a tax increase in 2018 and in 2027:
Since we spend so much time talking about the middle class, let’s look at the middle quintile of the income range. This year that includes households with incomes between $48,600 and $86,100. In 2018, more than 3 million of these households will see their taxes go up. By 2027, the figure rises to more than 11 million households. The average amount that these people will see their tax bills increase is more than $1,000.
But that’s just the beginning. If you add up everyone getting a bigger tax bill, it comes out to 12.8 million households in 2018, and 47.5 million in 2027, or a quarter of all households.
If you had said a year ago that Republicans would produce a bill that raises taxes on a quarter of all American households, no one would have believed you. It isn’t just that there are many particular groups who stand to get huge tax increases — graduate students, parents who adopt children, people with large medical expenses — it’s also that they’re raising taxes on such broad swaths of the population.
So how are they going to spin it? They only have two choices. The first is just to deny it, to say that everyone is wrong and in fact no one is getting a tax increase. “At the end of the day, nobody in the middle class is going to get a tax increase,” says Senate Majority Leader Mitch McConnell (R-Ky.). Budget director Mick Mulvaney claims that President Trump won’t accept any bill that raises taxes, and for all we know Trump is completely unaware that that is what the House bill does. On Tuesday, Trump told Democratic senators in a phone call that he would be a “big loser” if the tax bill were approved. “The deal is so bad for rich people, I had to throw in the estate tax just to give them something,” he reportedly said. News reports did not indicate whether the senators burst out in derisive laughter at this obvious lie.
The other choice Republicans have is to admit that the bill raises taxes on tens of millions of people, but say that it doesn’t matter because the situation is only temporary. Once the corporate tax cuts kick in, all Americans will ride a rocket to prosperity powered by the magical fuel of trickle-down economics. Gary Cohn, the president’s chief economic adviser, told John Harwood that the reason people in the middle class would make out okay in the end is that when you cut corporate taxes, “we see the whole trickle-down through the economy, and that’s good for the economy.”
To sum up, the GOP’s two spin options are the outright lie (nobody will get a tax increase) or the absurd and dishonest baloney (people’s taxes will go up now, but they’ll get it back later).
Is that going to fool anyone? It’s hard to see how. Democrats will hammer Republicans for increasing taxes, and reporters will keep pushing them to answer questions about the people who lose out in this bill. It won’t be easy to keep denying the facts. While the Senate bill may differ in some ways from the House’s, there’s little indication that the broad strokes are going to change.
That doesn’t mean they have no chance of pushing the bill through. But it does mean that the public is not going to be cheering. You might be able to persuade Americans to accept a tax increase if it was for something we all wanted — universal health care, or free college, or an enormous infrastructure initiative. But raising your taxes so that Trump and his kids can get a cut and a bunch of rich investors can boost their stock dividends? That’s going to be an awfully hard sell.