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Groton Daily Independent
Thursday, Dec. 21, 2017 ~ Vol. 25 - No. 165 ~ 39 of 44
Only in 2027 do the wealthiest taxpayers get 83 percent of the bene t, as Schumer says. In 2018, roughly 21 percent of the tax cut’s bene ts go to the richest 1 percent, a much smaller gure, though still a disproportionate share. Just 11 percent will go to the middle one- fth.
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REP. NANCY PELOSI, House Democratic leader: “86 million middle class families get a tax hike.” — tweet Wednesday.
THE FACTS: She’s ignoring all the middle class tax cuts before 2027; that year, taxes will be slightly higher for the middle class unless the cuts are extended.
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TRUMP on his tax legislation: “Obamacare has been repealed in this bill.” — remarks Wednesday.
THE FACTS: It hasn’t. The tax plan ends nes for people who don’t carry health insurance. That’s a
major change but far from the dismantling of the law.
Other marquee components of Obama’s law remain, such as the Medicaid expansion serving low-income
adults, protections that shield people with pre-existing medical conditions from being denied coverage or charged higher premiums, income-based subsidies for consumers buying individual health insurance policies, the requirement that insurers cover “essential” health bene ts, and the mandate that larger em- ployers provide coverage to their workers or face nes.
Also, the tax bill doesn’t repeal nes for uninsured individuals until the start of 2019, meaning the “indi- vidual mandate” is still in force for next year unless the administration acts to waive the penalties.
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TRUMP: “When the individual mandate is being repealed, that means Obamacare is being repealed because they get their money from the individual mandate.” — remarks Wednesday.
THE FACTS: This is also wrong. The nes on people who don’t carry health insurance only provide a small fraction of the nancing for the program. Most of the money comes from higher taxes on upper-income people, cuts in Medicare payments to service providers, and other tax increases.
The Congressional Budget Of ce estimated that nes from uninsured people would total $3 billion this year, while the government’s cost for the coverage provided under the health law would total about $117 billion.
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TRUMP: “So we’re at 3.3 percent GDP. I see no reason why we don’t go to 4 percent, 5 percent and even 6 percent.” Speaks of GDP “getting up to 4, 5, and even 6 percent, because I think that’s possible.” — Cabinet meeting last week.
THE FACTS: There are no signs the economy is capable of delivering a phenomenal and rarely achieved growth rate in the order of 6 percent, or 5 or even 4. Federal Reserve of cials and most mainstream economists expect economic growth to hew closer to 2 percent. The economy last cleared the 6 percent hurdle in 1984 and only for that eeting year, at 7.3 percent. This was a different time, when baby boom- ers were at prime working ages, instead of today when they’re starting to retire. The Federal Reserve had boosted growth by steadily slashing a key interest rate from its 1981 peak of 20 percent, while the Fed today is slowly increasing the same rate. Also, the national debt was much lower.
Trump’s tax cuts are forecast to max out at roughly $280 billion in 2019, says Congress’ Joint Committee on Taxation. Yet to generate growth of 6 percent, those cuts would have to spur a massive $1.2 trillion gain to the gross domestic product. No administration analysis emerged to show how this could be possible.
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HOUSE SPEAKER PAUL RYAN: “We are making things so simple that you can do your taxes on a form the size of a postcard.” — remarks when the tax bill came out Nov. 2.
THE FACTS: Don’t count on it. Few accountants would agree that simpli cation has been achieved. The combination of temporary provisions, partial elimination of deductions and other loopholes, and differing tax rates for business income and wages in the new law has, if anything, added further complications.
Some middle-class taxpayers may see simpler returns because the standard deduction has doubled in