Senate Plan Could Increase Taxes on Some Middle-Class Workers
- 6 years ago
Senate Plan Could Increase Taxes on Some Middle-Class Workers
“You can’t guarantee that absolutely no one sees a tax increase,
but what we are doing is targeting levels of income and looking at the average in those levels and the average will be tax relief for the average taxpayer in each of those segments.”
The Senate bill unveiled on Thursday would raise taxes on millions of middle-class families, according to a preliminary New York Times analysis.
The Senate bill is less likely than the House bill to yield tax increases for high-income Americans, in part because it cuts the top marginal personal tax rate, while the House bill creates a so-called “bubble rate”
that would actually raise taxes on many high-salaried workers.
Under the Senate plan, “Americans are especially likely to face a tax increase if they have a smaller family, have mostly wage income instead of investment income, or claim some of the many deductions
that the bill repeals, like those for state and local taxes and employee business expenses,” said Lily Batchelder, a professor and tax specialist at New York University Law School, who worked on economic policy in the Obama administration.
WASHINGTON — Mitch McConnell, the Senate majority leader, acknowledged on Friday
that the Republican tax plan might result in a tax hike for some working Americans, saying he “misspoke” days earlier when he said that “nobody in the middle class is going to get a tax increase” under the Senate bill.
On the other hand, the Senate bill, unlike the House version, would eliminate the deduction for property taxes, which
could lead to higher federal taxes for homeowners in areas with high property tax rates or expensive housing markets.
The analysis did not seek to calculate how workers might benefit from a steep cut in the corporate tax rate, which both the Senate
and House bills would reduce to 20 percent from a top rate of 35 percent today, or project how the bills might increase economic growth and, with it, Americans’ wages.
The Senate Finance Committee bill would, on average, cut taxes for people at every income level.
“You can’t guarantee that absolutely no one sees a tax increase,
but what we are doing is targeting levels of income and looking at the average in those levels and the average will be tax relief for the average taxpayer in each of those segments.”
The Senate bill unveiled on Thursday would raise taxes on millions of middle-class families, according to a preliminary New York Times analysis.
The Senate bill is less likely than the House bill to yield tax increases for high-income Americans, in part because it cuts the top marginal personal tax rate, while the House bill creates a so-called “bubble rate”
that would actually raise taxes on many high-salaried workers.
Under the Senate plan, “Americans are especially likely to face a tax increase if they have a smaller family, have mostly wage income instead of investment income, or claim some of the many deductions
that the bill repeals, like those for state and local taxes and employee business expenses,” said Lily Batchelder, a professor and tax specialist at New York University Law School, who worked on economic policy in the Obama administration.
WASHINGTON — Mitch McConnell, the Senate majority leader, acknowledged on Friday
that the Republican tax plan might result in a tax hike for some working Americans, saying he “misspoke” days earlier when he said that “nobody in the middle class is going to get a tax increase” under the Senate bill.
On the other hand, the Senate bill, unlike the House version, would eliminate the deduction for property taxes, which
could lead to higher federal taxes for homeowners in areas with high property tax rates or expensive housing markets.
The analysis did not seek to calculate how workers might benefit from a steep cut in the corporate tax rate, which both the Senate
and House bills would reduce to 20 percent from a top rate of 35 percent today, or project how the bills might increase economic growth and, with it, Americans’ wages.
The Senate Finance Committee bill would, on average, cut taxes for people at every income level.