It is disingenuous and dishonest to say the Republican tax reform proposals only benefit the rich and large corporations at the expense of the lower income and middle class.
Analysis by the nonpartisan Tax Foundation shows under both House and Senate plans there will be increased GDP, wages will rise, and more jobs will be created. GDP is projected to increase to 3.7% vs. 1% anemic growth over past decade. This will result in 2.9% higher wages and 925,000 more full time jobs. With increased GDP, all incomes will increase 4.4% and the 1% will increase 4.5%. The standard deduction is increased to $12,000 for single filers and $12,000 for joint; the child credit increases to $1,600/child and there is a new $300 per person family tax credit.
Under House plan, marginal tax rate for rich millionaires is maintained at 39.6% and under Senate plan at 36%. Nearly half of people pay no Federal income tax and, with refundable tax credits, they will receive checks for taxes they did not pay
Analysis of 9 different hypothetical income and filing status scenarios shows every income group (ranging from $30,000 to $2 million) benefits with a tax cut ranging from 1.3% to 3.6% with the largest cut accruing to moderate incomes. The married single wage earner with 2 children, $2 million income, and $2.5 million mortgage receives tax cut of only 0.5 %.
As to the elimination of the estate tax, this exemption is raised to $10 million and benefits the family farm owner and small businesses by not forcing sale to pay inheritance taxes. This is of little or no benefit to billionaires like Trump.
The pass through rate for small businesses is capped at 25%. While greater than 20% cap for large businesses, investors in corporations pay taxes on dividends which results in double taxation, well above the small business rate.
Contrary to popular thinking, corporations do not pay taxes; they collect taxes, pay it to government which, after a handling fee, trickles it down to people who don’t pay taxes.
The purpose of the tax reform proposals is to simplify the tax code, reduce tax burden on the middle class, and make corporate tax rate more competitive in world market place. The Republican proposals achieve these objectives.