How would the current GOP tax plan affect the middle class?

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Answered by: Maxwell, An Expert in the Taxes, Policy, and Politics Category
The tax plan as it is presented today, mid-November of 2017, is a slap in the face to middle class voters regardless of political affiliation. With the news cycle inundated by the current administration, the tax plan presented by the GOP in the Senate has largely flown under the radar. The plan is touted by the President and the Republicans as a break for middle class families across the country. In fact, the bill would do nothing to help middle-class families. If the bill passes, by 2026 more than half of middle-class families will see a tax increase. The only argument used to back it up is generally that of trickle-down economics. The bill reduces corporate tax rates from 35% to 20%. This argument is that when corporations have higher profit, they will use that profit to expand and in the process create jobs. However, trickle-down economics is highly debated and there are strong arguments suggesting it often fails. Recently we saw Amazon receive large tax breaks as they slashed jobs. For those workers who lost their jobs, not much trickled down to them. That said, there are many instances of corporations taking advantage of their newly gained profits and creating more jobs. Either way, it is hard to sell a plan as popular to the middle class when within 16 years it will cause taxes to rise for half of them while corporate tax rates plummet. Another important thing to consider when reviewing the plan is the effect it will have on the national deficit. Because the GOP tax plan is a major tax cut for high income groups, dubbed by the president early on as the "Cut! Cut! Cut! Act", less money would come into the government if it were passed. The CBO predicted that the tax plan would raise the deficit by $1.7 trillion over the next decade. The national debt has been rising for decades, but a $1.7 trillion increase would be kicking a dead $20.5 trillion horse. Although there are major problems with this tax plan, it is being supported already by a number of Senate Republicans including Mitch McConnell. Despite all this, there is little public outrage at the tax plan in much of America. Large swaths of rural land largely inhabited by conservatives seems to ignore the issue altogether despite the fact that most households do not surpass the middle class mark. This is especially so considering the very liberal definition of the term "middle class" used by the authors and promoters of the plan. The GOP tax plan uses a description of middle class that includes families earning 2 to 3 times the median income of the average middle class household. Families higher up that economic ladder will receive more benefits than those below them. Essentially, this is a tax plan for the rich. This should be the attack used by the Democrats to oppose the bill, but opposition does not focus much time on it. This is a clear mistake. There are poor, middle-class, and rich voters in both parties. If the entirety of the public was made aware of the tax plan, and knew what the Democrats were opposing, they could win big political points in Washington.



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