This week, the House released the text of its tax reform bill, the Tax Cuts and Jobs Act. Rep. Erik Paulsen (R-Minn.), who helped craft the bill, has come out in full support of it, calling it a “Once-in-a-Generation” opportunity in a press release and defending it vigorously in an op-ed published in the Eden Prairie News.
“Fixing a broken tax code is the best way to grow our economy by delivering bigger paychecks and more jobs.” Paulsen wrote. “After years of preparation and many months of daily meetings, I’m excited to report that we are on the cusp of what could be a historic tax overhaul that is simpler and fairer for all Americans.”
But Americans are less enthusiastic about the proposed tax reform. According to a recent CBS News poll, only about one in four Americans believes that a tax overhaul should be “the top priority for the president and Congress.” Another poll by the Wall Street Journal and NBC News found that just 25 percent of respondents believed the GOP’s tax plan was a good idea. Only Morning Consult found a relatively large amount of support for the Republican tax plan, with almost half of all respondents in its poll expressing “support” for it.
It’s easy to understand why Americans might be skeptical about the GOP’s tax reform efforts. One reason is that the tax cuts will add an estimated $1.5 trillion to the national debt over 10 years. The Republicans plan on solving this deficit by making big cuts to Medicare, Medicaid, student loan assistance, and food stamps.
The reform plan also won’t lead to substantial benefits for most Americans. The biggest tax cuts go to corporations, who will enjoy a 15 percent decline in their tax rate. Paulsen justified these cuts in his op-ed, writing, “The tax code should be built for growth. Business leaders across the country agree that in order to grow and create more jobs, we must make sure America stays globally competitive.”
But a recent Pew Research Center survey found that most Americans－52 percent－want to see large businesses and corporations pay more in taxes. And almost 60 percent of people believe that corporations won’t use the money they save on taxes to create jobs－a belief that has solid foundations in empirical research.
The richest Americans will also see a large tax cut. According to the nonpartisan Tax Policy Center, the richest 1 percent of Americans would see their after-tax incomes rise by 8.5 percent, while the richest 0.1 percent of Americans would see their after-tax incomes rise by 10 percent. This, again, is not something that most Americans want; the same Pew Research Center study found that only 24 percent of Americans supported lowering taxes on households earning $250,000 or more.
Middle-class Americans, on the other hand, would only see an average increase of 0.5 to 1.2 percent in their after-tax income.
Perhaps if Congress had chosen to adopt a more inspired name like the one President Trump offered (the Cut Cut Cut Act), more people would be as energized about tax reform as Rep. Paulsen is.