The Republican Tax Plan Is Even Worse Than You Thought Before Thanksgiving

November 27, 2017

Washington Post: Senate GOP Tax Bill Hurts The Poor More Than Originally Thought, CBO Finds.

“By 2019, Americans earning less than $30,000 a year would be worse off under the Senate bill, CBO found. By 2021, Americans earning $40,000 or less would be net losers, and by 2027, most people earning less than $75,000 a year would be worse off. On the flip side, millionaires and those earning $100,000 to $500,000 would be big beneficiaries, according to the CBO’s calculations.”

Washington Examiner: Top Academic Economists Think Republican Tax Plan Wouldn't Boost Growth, Would Increase Debt.

“Top academic economists say the Republican tax plan would not substantially boost economic growth but would add to the federal debt, according to a new survey released Tuesday. Fifty-two percent of the economists surveyed by the University of Chicago's IGM Forum responded that the GOP tax plan would not substantially increase the size of the economy. Another 36 percent were uncertain. Only one, Stanford University's Darrell Duffie, said the plan is likely to increase the gross domestic product. ‘Aside from the redistribution of wealth, hard to see this changing much,’ said the University of Chicago's Richard Thaler, the most recent winner of the Nobel Prize in economics. All but one of the respondents said the plan would increase the federal debt, with the lone exception indicating that he was uncertain. The Trump administration has maintained that the tax cut, totaling $1.5 trillion over a decade, would increase economic growth enough to pay for itself.”

Bloomberg: New York Could Lose Some Top Earners Under GOP Tax Bill, Goldman Says.

“New York City could lose some of its highest-income residents if the tax bill making its way through the U.S. Congress becomes law, according to estimates from Goldman Sachs Group Inc. Initial analysis suggests that the legislation ‘could eventually lower the number of top-income earners in New York City’ by 2 percent to 4 percent, Goldman economists led by Jan Hatzius wrote in a note dated Nov. 24. The trigger would be a provision that restricts the ability of taxpayers to deduct the levies they pay to state and local authorities, which would disproportionately hit locations with relatively high rates. Home prices across the U.S. might also decline by 1 percent to 3 percent, Goldman says, through cost-of-capital effects related to a proposed restriction of property-tax deductions. … ‘These changes could create additional fiscal challenges for the high-tax areas, some of which already face structural pension funding issues,’ the economists said.”

Fox Business: NY Homeowners Will See Taxes Increase Without SALT: Rep. King.

Rep. Peter King, a staunch opponent to the current version of the House Republicans’ tax reform plan, said the elimination of the state and local tax (SALT) deduction could increase the average New York homeowner’s taxes by at least $1,000. ‘Maybe more than that -- $2,000 to $3,000,’ King, R-N.Y., told Maria Bartiromo on ‘Sunday Morning Futures.’ ‘It’s difficult to fully compute it right now, but there’s no doubt there will be increases.’”