“TPC staff found an error in the preliminary distributional analysis of the Tax Cut and Jobs Act (TCJA) that we released today. This error involved the additional child tax credit component of the proposed legislation,” the organization said in a statement Monday night, several hours after releasing its report that showed the benefits of the tax bill were skewed toward the richest Americans.
The center has pulled all materials related to its initial report and said it will issue a corrected version as soon as it is able, likely Tuesday.
Republicans and Democrats alike have cited the TPC’s assessment of tax proposals in recent years, but the error opens the organization to attacks from either party should lawmakers not like its conclusions.
The uncorrected version of the report released Monday showed that the bulk of the House GOP bill’s benefits would go to the wealthy and that many working class households earning under $48,000 would see their tax bills rise in upcoming years. That conclusion contradicted Republican claims that the bill was crafted to help the middle class.
Someone familiar with the error who was not authorized to speak publicly said the revised report would likely come to a similar conclusion overall, but that exact numbers of how many Americans are helped and hurt would be different.
TPC's now-retracted findings echoed what the nonpartisan Joint Committee on Taxation — the official congressional body that analyzes tax bills — found: that some in the middle class would see a tax increase under the bill.
House Republicans are attempting to pass a tax bill by Thanksgiving. House Speaker Paul D. Ryan (R-Wis.) said Sunday that Republicans in his chamber are “on track” to make that happen.
“We have to have tax cuts for people in the middle. This delivers that, and we really are convinced this is going to help get our economy growing and reaching its potential,” Ryan said on Fox News Sunday.
Ryan often says that a middle income family of four making $59,000 a year would pay $1,182 less in taxes next year, but that amount would decrease over time and would be a tax hike for the family by 2024, according to New York University tax professor David Kamin. A key new benefit aimed at helping the middle class — the Family Flexibility Credit — goes away after 2022 in the GOP bill. That credit is different from the Child Tax Credit that the TPC said was at the center of its initial mistake.
The Family Flexibility Credit is worth $300 per person or $600 per couple, making it an important tax saving for the working and middle classes.
Some in the GOP argue that a future Congress is highly unlikely to let that credit expire, but that is dependent on politicians down the road making difficult decisions about taxation, spending and deficits.
Republicans are currently debating whether they can extend the credit in this bill, but that would likely necessitate raising money on someone else. The bill would already add $1.5 trillion to the nation's deficit. Adding any more would likely run afoul of the rules governing the procedure Republicans hope to use to get a version of their tax bill through the Senate.