Below is a statement by the Montana Budget and Policy Center in response to the United States House release of the Tax Cuts and Jobs Act:
“The House GOP’s tax plan would enact large tax cuts that are heavily skewed toward wealthy households and profitable corporations, while increasing the federal deficit over time,” said Heather O’Loughlin, co-director of the Montana Budget and Policy Center. “These tax cuts will result in even greater pressure on Congress to make cuts to programs that serve Montana seniors, people with disabilities, children, and working Montana families, all the while putting millions of federal dollars that are injected into Montana’s local economies at risk.”
The House Republican tax plan released today is more of the same. Just like earlier proposals from the Administration and congressional Republicans, it would increase federal deficits, provide enormous tax cuts to high-income households and corporations, and hurt working and middle-income families.
The House tax plan would increase federal deficits by at least $1.5 trillion over the coming decade.
- To put that number in context, $150 billion per year would roughly equal:
- Doubling the Pell Grant program, which provides aid to low- and moderate-income college students; AND
- Doubling cancer research at National Institute of Health (NIH); AND
- Funding the full backlog of needed maintenance at our national parks; AND
- Providing child care assistance to six million children; AND
- Providing opioid addiction treatment to 300,000 people; AND
- Training 3.5 million workers for in-demand jobs.
Tax cuts under the House plan would go overwhelmingly to high-income households.
- Even though the House tax plan does not cut the top rate, it still delivers large tax cuts to the top 1 percent because of the corporate tax, pass-through, and estate tax cuts. And the new “millionaires bracket” is itself a tax cut of $24,000 to millionaires since they would no longer need to pay a 39.6 percent rate on income between $481,100 and $1 million.
Business tax changes in the plan would benefit high-income households and large multinational corporations, not small businesses or the middle class.
- The House bill creates a lower corporate tax rate – 10 percent – for multinationals’ foreign profits, half its 20 percent rate on domestic profits. That’s a big incentive for companies to shift profits and would give international corporations a tax advantage against local small businesses.
- The special lower rate for pass-through businesses overwhelmingly benefits the wealthy, such as hedge fund owners and real estate investors.
The plan offers no benefits to most low-income working families: instead, it hurts many.
- While the plan increases the Child Tax Credit (CTC) increase, it leaves out more than 10 million children in low-income working families. Another roughly 6 million would receive only small benefits over time because their credit would grow with inflation.
- Low-income working adults without children and non-custodial parents are also largely excluded from the plan’s tax cuts, so millions would continue to be taxed into or deeper into poverty by federal income and payroll taxes.