The income tax now set up by the Republican Tax Reform SHOULD have Democrats jumping for joy – it makes it even MORE Progressive than before (which I don’t think is a good thing). Emphasis mine:
The Joint Committee on Taxation (JCT) has released its distributional analysis of the final Republican tax bill. The bill provides even larger percentage cuts for middle earners than previous versions of the legislation. If the legislation is enacted, higher earners will pay an even larger share of the overall income tax burden than they do now. Our highly “progressive” income tax will be even more progressive. That approach is counter to sound fiscal governance and undermines the growth potential of tax reform, but that is what Republicans are delivering…
…Looking at JCT’s table for 2019, second column, the percentage cuts are roughly similar across income groups from $20,000 to $1,000,000. But the JCT table slants the results by including payroll and excise taxes. The table under-measures the percentage cuts to the middle compared to the top. The table below takes estimated payroll and excise taxes out of the JCT data. It shows individual and corporate income tax cuts as a percentage of estimated individual and corporate income taxes paid under current law. Middle-income households will receive by far the largest percentage income tax cuts in 2019.
Look at the right hand column – THAT is what is most important in all this. If middle class goes from $40K to $121K, then that group gets the largest cuts based on JTC’s assumptions. Yes, corporations are going from 39% (updated: I had 35%) down to 21% – so what (as I’ve already said that anyone that known anything about economics knows that ultimately, corporations don’t pay taxes).
Simple recognition of math – a cut of 56% is a lot better than a 6.4% or an 11.6%.
(H/T: The Corner)
