In the era of “fake news” it is easy to be confused about complicated matters of great importance like the GOP tax plans moving through Congress. Depending on your news feed, the tax plans could help or hurt the middle-class, add to the federal deficit or reduce it, boost jobs or send them overseas. One of the best ways to cut through the tax-plan fog is to look at expert opinion from nonpartisan evidence-based sources and use common sense.
While several members of West Virginia’s Congressional delegation have said that the GOP tax plans will boost incomes for West Virginia’s middle class by nearly $2,000, don’t expect a pay raise. That’s because mainstream, independent, expert organizations such as the Joint Committee on Taxation, the Congressional Budget Office (CBO), non-political experts at the Treasury Department, and private experts like the non-partisan Tax Policy Center all agree workers would get only a small share of the benefits of corporate tax cuts. And the small share of gains that do go to “workers” would mostly show up in the salaries of high-paid executives and CEOs, not typical workers.
It is also not surprising that most economic experts believe the tax plan won’t do much to grow the economy and will substantially increase the federal debt. In a recent survey by the University of Chicago, just one out of 38 prominent economists surveyed agreed that the proposed GOP tax plan would substantially grow the economy. Meanwhile, all but one economist said the tax changes would substantially increase the federal debt. These results mirrored findings from both the Tax Policy Center and the University of Pennsylvania’s Penn Wharton Budget Model that found the Senate tax plan would boost growth by less than one percent.
If the goal is to put more money in the hands of working families in West Virginia, it is quite simple – give them the biggest tax cuts. The Senate GOP tax plan does the opposite. Both the Joint Committee on Taxation and the Congressional Budget Office have concluded that by 2027 those earning below $75,000 would see a tax increase, while those making over $1 million would see the largest tax cuts. The central reason why lower-income people get hit so hard by the Senate GOP tax bill is because the permanent tax cuts for corporations and wealthily individuals are paid for with higher taxes on many middle-income families. GOP leaders are doing this to prevent adding more than $1.5 trillion to the deficit.
While the GOP Senate tax plan may please their wealthy donors, the public is largely opposed to the plan. A recent poll by Quinnipiac University found that a majority of voters disapprove of the GOP tax proposals, while 62 percent of voters said the plan would mainly help the wealthy and 59 percent said it favors the rich as the expense of the middle class. A recent survey of small businesses showed similar results; with 51 percent of small businesses opposing the Senate tax plan.
We need to create good job paying jobs and build a strong economy in West Virginia. The problem is the Senate tax plan is not going to get us there. In fact, it is much more likely that the tax cuts will do what they have always done: increase budget deficits, threatening the programs that everyone benefits from in West Virginia, including Medicaid, Medicare, Social Security, education, scientific research, infrastructure, and other important investments. Not to mention that according to the CBO, the Senate GOP tax plan would increase the number of people without health insurance by 13 million.
The Senate GOP tax will ultimately raise taxes on many middle- and lower- income families and leave thousands of West Virginians without health insurance to pay for permanent tax cuts for profitable corporations. Don’t buy the magic math on the tax plan. If they wanted you to have a big tax cut, they would have given you one.