Drudge Retort: The Other Side of the News
Saturday, November 04, 2017

A day after the GOP unveiled its plan promising middle-class relief, the House's top tax-writer, Rep. Kevin Brady, R-Texas, released a revised version of the bill that would impose a new, lower-inflation "chained CPI" adjustment for tax brackets immediately instead of in 2023. That means more income would be taxed at higher rates over time -- and less generous tax cuts for individuals and families.

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The change, posted on the website of the Ways and Means Committee, reduces the value of the tax cuts for ordinary Americans by $89 billion over 10 years compared with the legislation released with fanfare Thursday.

As wages rise, middle-class taxpayers would have more of their income taxed at the 25 percent rate instead of at 12 percent, for instance.

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LOL.

#1 | Posted by madscientist at 2017-11-04 08:54 PM | Reply

Thanks, Obama.

#2 | Posted by Danforth at 2017-11-04 09:17 PM | Reply

Paul Ryan's poster family for middle-class tax cuts would ultimately get a tax hike

Oops.


The tax cut Ryan talks about initially comes from three main sources. First, the plan introduces a Family Flexibility Credit worth $300 for every adult in the household. That's $600 off taxes for the $59,000 a year household, right off the bat. Second, the plan would place this family into a 12 percent tax bracket, down from 15 percent now. Third, the plan increases the child tax credit from $1,000 per kid to $1,600 per kid. These cuts are partially offset by the loss of the personal exemption, which under current law will allow families to deduct $4,150 per person from their taxable income in 2018, but this hypothetical family would still come out ahead overall.

But then, as Kamin explains, three funny things happen:

In 2022, the Family Flexibility Credit expires. This is presumably to make the tax bill cost less for Senate rules purposes, and Republicans will argue that the goal is to make it permanent at that point. Still, in the bill as written, it goes away entirely, raising taxes for this family.
While personal exemptions rise with inflation, the Child Tax Credit doesn't, meaning its value erodes over time whereas the personal exemption's value is set to grow.
Finally, the plan switches to adjusting tax bracket thresholds using chained CPI, a slower-growing inflation measure. That leads to tax increases for everyone over time, as more and more people get pushed into higher tax brackets.
Put together, these factors lead to a mild tax hike by year 2024, and a $500 hike by year 2027 for this $59,000 a year family of four.

(Kamin also notes that the $1,182 savings figure is slightly off even in 2018. The real savings versus current law is $1,106; the $1,182 number comes by comparing the 2018 tax burden under the plan to the 2017 tax burden under current law, not what the family would pay in 2018 under current law.)


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#3 | Posted by BruceBanner at 2017-11-04 10:40 PM | Reply

Well someone has to pay so that Paris Hilton can get her daddy's money tax free.

#4 | Posted by 726 at 2017-11-05 07:35 PM | Reply

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