“It’s a tax cut for everybody. There’s a lot of misinformation out there, a lot of confusion — and more or less, a lot of hits from the left. But it’s a tax cut for everybody. … If you look underneath the rate, more of your income is taxed at a lower rate, and so according to the Joint Committee on Taxation — which is the official scorekeeper of these things — every single person, every rate payer, every bracket person gets a rate cut.”
— House Speaker Paul D. Ryan (R-Wis.), interview on the Rush Limbaugh Show, Nov. 7, 2017
“Everyone enjoys a tax cut all across the board.”
— Ryan, interview with Laura Ingraham on Fox News, Nov. 6
“You take a look at a lot of people’s districts and everyone’s going to be better off in this thing.”
— Ryan, interview with The Washington Examiner, Nov. 8
House Speaker Ryan has been quite a booster for the House GOP tax plan. Look at the words he has used in a series of interviews: “every single person, every rate payer, every bracket person gets a rate cut”; “everyone enjoys a tax cut across the board”; “it’s a tax cut for everybody.”
That’s quite a piece of legislation. Normally every major bill has winners and losers, as President Barack Obama discovered after he foolishly promised health care in which everyone could keep their plan if they liked it.
Then, a funny thing happened after we contacted Ryan’s office on the evening of Nov. 8 and asked how he could keep saying this. His language suddenly changed.
“What the analysis shows us, the average taxpayer in all income levels gets a tax cut.”
— Ryan, on the Fox News morning show with Bill Hemmer, Nov. 9
“When you take the thing all in its totality, what the analysis shows us, whether it’s analysis from JCT [Joint Committee on Taxation], from the Tax Foundation, or even TPC [Tax Policy Center], that the average households at every income level see a tax cut.”
— Ryan, remarks to reporters, Nov. 9
What’s going on here? AshLee Strong, Ryan’s spokeswoman, acknowledged he misspoke.
There’s obviously a big difference between “every single person” and “average taxpayer in all income levels.” Ryan, when he is speaking more precisely, is referring to distributional tables like this one produced by the Joint Committee on Taxation.
You will note that in 2019, every income category shows a decline in federal taxes. Now, for some income levels (such as $30,000 to $40,000), it shows an increase in later years. We’ll explain that in more detail below.
But claiming every taxpayer gets a tax cut is simply wrong. Let’s look at another distribution table, this time produced by the Tax Policy Center. It shows the winners and losers more clearly. In 2018, it shows 7 percent of taxpayers would have an average tax increase of more than $2,000. That’s at least 10 million people. (In fact, almost 30 percent of the top 0.1 percent would experience a tax increase.)
It gets even worse in 2027, when 25 percent of taxpayers would face a tax increase. That’s mainly because certain tax provisions for the middle class expire midway through the 10-year period covered by the tax cut. Strong said it was “bogus” to focus on that because Republicans are certain that these tax provisions would be extended. (Republicans are ending this tax cut to make the tax cut look less expensive and thus fit in the $1.5 trillion box created by the budget resolution.)
As Ryan put it to Rush Limbaugh: “It’s just a sunset in five years of some provisions that we never, ever intend to be removed. … The reason we did that is to conform with the budget rules so that we can make sure that this thing cannot be filibustered in the Senate.”
Well, there’s no guarantee the tax provisions will be extended, of course. A lot depends on the makeup of the Congress when the provisions expire in 2022. But, for the sake of argument, let’s assume that the tax provisions are extended. What happens then?
While there is no official score, Ernie Tedeschi, a managing director at Evercore ISI and former economist at the Treasury Department under Obama, crunched the numbers for 2027, assuming the policies in place at the start of the tax plan never expired. Tedeschi used the Open Source Policy Center tax model that was created by the American Enterprise Institute, so the figures are going to be different than the TPC model. But the broad trends are what is instructive.
First, take a look at what happens to families with children. In just about every category except under $10,000-income, a huge number of families face a tax hike. All told, more than 40 percent of families with children would experience a tax hike.
Tedeschi also ran the numbers for all taxpayers. Here again, a substantial portion of taxpayers — about 30 percent — will end up with higher taxes.
(Incidentally, this means that a statement by Sen. Charles E. Schumer (D-N.Y.) in April — that “millions would pay more” — previously rated as “Verdict Pending” now earns a Geppetto Checkmark. The rating has been updated to reflect the shift.)
Strong pointed to Ryan’s “more precise” phrasing in his interview with Hemmer on Fox News. “Everyone’s personal financial situation is different, but the speaker was making the point that no matter where you are on the income scale, the average taxpayer sees a tax cut under our plan,” she said.
The Pinocchio Test
Regular readers know we generally do not hand out Pinocchios when a politician admits error. Ryan has admitted he misspoke and changed his language. That’s always pleasing to see, and he earns credit for that shift. As regular readers know, we don’t try to play gotcha here at The Fact Checker.
Still, on at least three occasions over three days, Ryan spoke in sweeping terms that flatly stated every taxpayer would get a tax cut. That’s wrong and misleading, and ordinarily worthy of Four Pinocchios. Even if one assumes that all of the tax provisions remain in place — a big assumption — millions of Americans will still see a tax hike, even if the average person in their income range might receive a tax cut.
In the case of married families with children — whom Republicans are assiduously wooing as beneficiaries of their plan — about 40 percent are estimated to receive tax hikes by 2027, even if the provisions are retained. That would be a nasty surprise for folks who had heard Ryan’s less-precise spin. We understand the point he was trying to make but he needs to be more careful with his language in the future. We’ll certainly be watching to see if Ryan’s enthusiasm tips the soup again.
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