Tax reform bill needs some reform
If a bipartisan assessment of the U.S. Senate’s tax reform bill is accurate, lawmakers need to go back to the drawing board. A measure being billed as tax relief should not force millions of Americans to pay more.
Analysts for Congress’ Joint Committee on Taxation have concluded the Senate plan would increase taxes for about 13.8 million moderate-income households.
Sen. Orrin Hatch, R-Utah, insisted only “a relatively small minority of taxpayers could see a slight increase in their taxes.” Many people would disagree with Hatch, who is chairman of the Senate Finance Committee. Nearly 14 million families does not sound like “a small minority.”
In fact, it is about 10 percent of all taxpayers. And, according to the panel’s staff, the number affected would go up to 21.4 million by 2025.
Hatch is right about one thing: For many of those affected, the increase would be relatively small – between $100 and $500 a year, affecting taxpayers with incomes between $75,000 and $200,000 a year.
But many of them fall squarely into the category of middle-class taxpayers, the very people Republicans in Congress have promised would get tax relief.
One major goal of tax reform bills in both the Senate and House of Representatives is to make it more attractive to do business in the United States. To that end, both houses propose dramatic decreases in corporate tax rates, taking the top level from the current 35 percent down to 20 percent.
That should create millions of new jobs for Americans.
Still, slashing taxes for big companies while increasing them for many middle-income families would — and should — leave a very sour taste in the mouths of many people.
Any sort of change in tax law is a complicated affair, balancing literally hundreds of special considerations. But increasing the taxes of millions of people is the wrong way to go.
If we are to have tax relief, let it not be selective to the point of not just leaving many families out — but indeed, of penalizing them.