Uneasiness about Trump’s middle-class tax plan
WASHINGTON — Republican lawmakers in red and blue states are expressing unease over the limited details about middle-class relief in the tax framework their leaders released last month, which has raised difficult questions about how to prevent some middle-income Americans from paying more due to fewer tax breaks.
As one example, the lack of specifics on how much to raise the child tax credit by has led to “frustration” among GOP lawmakers, said Rep. Chris Collins, a New York Republican and ally of President Donald Trump.
The early concern previews the political arguments that will surround tax legislation as Congress focuses in on it.
Collins said more specifics about GOP plans to increase the child tax credit would make the benefit for middle-income families clearer.
Instead, Republican lawmakers are fending off attacks that some middle-income families would be hurt because the plan calls for eliminating dependent exemptions and the state and local tax deduction.
“We are committed, the Republicans are committed — middle-income earners and even upper middle-income earners are not going to pay more in taxes, whether you live in Alabama, or whether you live in New York or New Jersey,” Collins said during a Bloomberg TV interview on Oct. 6.
Trump has repeated similar lines — that the middle class will be the plan’s main beneficiaries.
But the rhetoric so far doesn’t match up with the few details released on Sept. 27 — and some recent analyses by Washington policy groups have used specifics from earlier GOP tax proposals in combination with the latest framework to find that some middle-income taxpayers might pay more.
“Of course I want to see more about the middle-class tax relief,” said Senator John Kennedy, a Louisiana Republican. “How you fill in the details is going to be left up to Congress. Congress may not even follow the outline.”
The uneasiness comes as the House and Senate move to kick off the tax debate with a budget maneuver that would allow them to pass a bill without Democratic support.
GOP leaders say they want to complete the bill in 2017 to prevent election-year politics from getting in the way. But divisions linger in the party over core questions such as how much a tax cut can add to the deficit and how to find revenue offsets so changes to the tax code can be permanent.
The plan sets out three tax brackets for individuals — 12 percent, 25 percent and 35 percent — down from the existing seven rates, which top out at 39.6 percent. But it doesn’t specify the income ranges for the new rates, and congressional tax-writing committees will be given flexibility to add a fourth bracket for the highest earners.
‘Work of fiction’
The framework also calls for a near-doubling in the standard deduction for households, a “significant,” yet unspecified increase in the child tax credit and the elimination of personal exemptions for dependents.
A study by the nonpartisan Urban-Brookings Tax Policy Center found that most middle-income families would enjoy after-tax gains under the GOP framework, but that taxes would go up for almost 30 percent of people making $50,000 to $150,000.
House tax-writing Ways and Means Chairman Kevin Brady blasted that study as “a work of fiction that Stephen King would’ve been proud of.”
Trump’s chief economist Kevin Hassett said it used “imagined numbers” to fill in the blanks. The study said it used brackets outlined in the House GOP tax blueprint released in 2016.
Asked about the White House’s position that the tax plan is aimed at helping the middle class, Senate Democratic Leader Chuck Schumer was blunt: “I’ve never heard such a fraudulent statement.”
Kennedy said he, along with his fellow senators, are anxious to see the real numbers that will be used for the income brackets.
Those details are still being worked out and will be set by House and Senate tax-writing committees, White House Budget Director Mick Mulvaney said during a Fox News interview that aired on Oct. 8.
“We’ve not released the details,” he said. “Why? Not because they’re hidden. We don’t have them in a vault someplace. We simply haven’t settled on them yet.”