Details are still conveniently sketchy, but Congressman Goodlatte reacted favorably to the Trump-backed Republican “tax reform” plan announced Wednesday.
As for who stands to benefit the most from this plan: it’s clearly not the vast majority of Goodlatte’s Sixth District constituents. The New York Times reports:
The tax plan that the Trump administration outlined on Wednesday is a potentially huge windfall for the wealthiest Americans. It would not directly benefit the bottom third of the population. As for the middle class, the benefits appear to be modest.
The administration and its congressional allies are proposing to sharply reduce taxation of business income, primarily benefiting the small share of the population that owns the vast majority of corporate equity. President Trump said on Wednesday that the cuts would increase investment and spur growth, creating broader prosperity. But experts say the upside is limited, not least because the economy is already expanding.
The plan would also benefit Mr. Trump and other affluent Americans by eliminating the estate tax, which affects just a few thousand uber-wealthy families each year, and the alternative minimum tax, a safety net designed to prevent tax avoidance.
Mr. Trump has also pledged repeatedly that the plan would reduce the taxes paid by middle-class families, but he has not provided enough details to evaluate that claim. While some households would probably get tax cuts, others could end up paying more.
While we await more details, it’s worth noting that the massive tax cuts for the wealthy and corporations would cost the federal government trillions of dollars in revenue and cause a huge increase in the federal deficit.
The GOP’s outline for tax reform could cost the country $2.2 trillion in lost revenue over a decade, according to a preliminary study by the Committee for a Responsible Federal Budget , a fiscally conservative advocacy group.
“These numbers come with a high degree of uncertainty and exclude a number of potential offsets where no details exist. But it is clear that much more work needs to be done to ensure tax reform is fiscally responsible,” the group said in its study.
Senate Republicans are allowing themselves up to $1.5 trillion in deficit-financed tax cuts to pass tax reform. If the group’s estimates are correct, they will need to find billions more in revenues to pass the bill according to standards they set for themselves.
The plan’s Republican backers assure us that the tax cuts will spur unprecedented economic growth which will produce enough new tax revenues to close the gap in a way that has never happened before– a scenario rejected by (among others) Bruce Bartlett, an adviser to President Ronald Reagan.
So why isn’t a “deficit hawk” like Goodlatte– who routinely introduces balanced budget amendments to the Constitution and warns of the dire consequences of increasing deficits– sounding alarms about this latest plan?
One of Goodlatte’s GOP colleagues– who speaks more forthrightly than Goodlatte ever does– explained:
“It’s a great talking point when you have an administration that’s Democrat-led,” said Representative Mark Walker, Republican of North Carolina and the chairman of the Republican Study Committee, a group of about 150 conservative House members. “It’s a little different now that Republicans have both houses and the administration.”
You only need look at Goodlatte’s voting record to understand the truth of that remark.