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After 6 Months Of Tax Reform, Here Are The Top 6 Dem Lies About The Bill

- June 22, 2018

LIE #1: TAX CUTS AND JOBS ACT WILL DELIVER A "DEVASTATING TAX HIKE" TO THE AMERICAN PEOPLE

Democrats Falsely Claimed That GOP Tax Cuts Would Raise Taxes

Rep. Ted Lieu (D-CA), Vice Chair Of The DCCC, Stated That The House GOP Bill Would Raise Taxes. "'It's incredible,' said Rep. Ted Lieu (D-Calif.), a vice chair of the Democratic Congressional Campaign Committee who has helped the party recruit candidates in suburban west coast districts. 'I don't understand why they think raising taxes on the middle class to benefit the rich would be better for them electorally than doing nothing at all.'" (David Weigel, "Democrats See Backlash Over Republicans' Tax Bill As A Key To Winning In The Suburbs," The Washington Post , 11/19/17)

Minority Leader Nancy Pelosi (D-CA) Called The GOP Tax Plan "A Devastating Tax Hike." "Every Republican who votes to preserve the utter cruelty of this legislation will be forced to answer why they chose to inflict a devastating tax hike on their own constituents." (Press Release, "Pelosi Statement On Senate Passage Of GOP Tax Scam," Rep. Nancy Pelosi, 12/4/17)

Senate Minority Leader Chuck Schumer (D-NY) Claimed The GOP Tax Bill Would "Raise Taxes." "'My Republican friends must know that 'we needed to notch a political win' isn't a good enough excuse for a constituent who asks why you voted to raise their taxes but slash them for big corporations,' Senate Democratic leader Chuck Schumer said Friday." (Matthew Daly, "Senate Democrats Stand United Against GOP Tax Bill," The Associated Press , 12/3/17)

In Reality, Taxes Will Decline Across All Income Groups

A Tax Foundation Study Found That "The Tax Cuts And Jobs Act Would Increase The After-Tax Incomes Of Taxpayers In Every Taxpayer Group In 2018." "On a static basis, the Tax Cuts and Jobs Act would increase the after-tax incomes of taxpayers in every taxpayer group in 2018. The bottom 80 percent of taxpayers (those in the bottom four quintiles) would see an average increase in after-tax income ranging from 0.8 to 1.7 percent. Taxpayers in the top 1 percent would see an increase in after-tax income on a static basis of 1.6 percent, driven by the lower pass-through tax rate and the lower corporate income tax." ("Preliminary Details And Analysis Of The Tax Cuts And Jobs Act," Tax Foundation , 12/18/17)

The Tax Policy Center Found That In 2018, Taxes Would Decline On Average Across All Income Groups." "In 2018, taxes would be reduced by about $1,600 on average, increasing after-tax incomes 2.2 percent (table 1). Taxes would decline on average across all income groups. Taxpayers in the bottom quintile (those with income less than $25,000) would see an average tax cut of $60, or 0.4 percent of after-tax income. Taxpayers in the middle income quintile (those with income between about $49,000 and $86,000) would receive an average tax cut of about $900, or 1.6 percent of after-tax income." ("Distributional Analysis Of The Conference Agreement For The Tax Cuts And Jobs Act," Tax Policy Center , 12/19/17)

According To The U.S. Treasury Department, 90 Percent Of Americans Will See An Increase In Their Take-Home Pay, Due To The New IRS Withholding Rates. "'With this guidance, most American workers will begin to see bigger paychecks. We estimate that 90 percent of wage earners will experience an increase in their take home pay,' said U.S. Treasury Secretary Steven T. Mnuchin. 'The Administration's monumental tax reform legislation continues to provide economic benefits for hard-working Americans. These tax cuts will ensure that American workers are able to keep more of their hard earned income and decide how to spend, invest or save it.'" (Press Release, "New Withholding Guidelines Under The Tax Cuts And Jobs Act Will Increase Take Home Pay," U.S. Department Of Treasury , 1/12/18)

  • A Single Taxpayer Making $50,000 Paid Biweekly Would See An Increase In Their Paycheck Of $96.44 Or About $48.22 Per Week. "Let's say that you're a single taxpayer and you earn $50,000 per year, paid biweekly. For each pay period, you earn $1,923.08 before any taxes are withheld. When you filled out your employment paperwork, you claimed two allowances … we find that your per-paycheck withholding should drop to $168.09. Your paychecks should go up by about $96.44 because of the lower federal withholding called for by the tax-law changes." (Matthew Frankel, "Paycheck Bump Coming Soon -- Here's How Much You Can Expect," USA Today , 1/16/18)

LIE #2: CORPORATE TAX CUTS ONLY BENEFIT THE RICH

Democrats Repeatedly Claimed The Reduction In The Corporate Tax Rate Was A Tax Cut For The Super Wealthy

Minority Leader Pelosi Called The GOP Tax Cuts "A Ponzi Scheme That Corporate America Will Perpetrate On The American People." "Nancy Pelosi (D-Calif.) took a similar tack, calling the bill 'a Ponzi scheme that corporate America will perpetrate on the American people.' 'The American people deserve real, bipartisan tax reform that puts the middle class first,' she said. 'This Republican plan doesn't do any of that. In fact, it's a giveaway to corporations and the wealthiest.'" (Mike DeBonis and Damian Paletta, "Public Will Turn Against GOP Tax Bill, Schumer Predicts: 'The More It's In Sunlight, The More It Stinks,'" The Washington Post , 11/2/17)

Sen. Bob Casey (D-PA) Accused Republicans Of Passing "Tax Giveaways For Big Corporations And The Super-Rich." "I will not stand by as Republicans in Washington plot to cut these vital programs for the middle class, especially after they passed into law these tax giveaways for big corporations and the super-rich." (Sen. Bob Casey, Twitter Feed , 12/19/17)

Democrats Messaged The GOP Tax Cuts As A "Massive Corporate Giveaway." "But Democrats are sticking with their basic message that the tax bill is a 'massive corporate giveaway,' in which workers are getting a mere fraction of the benefits." (Bernie Becker, "Looking Into The Commish," Politico , 1/25/18)

In Reality, Workers Will Benefit From The Reduction

Before The Tax Bill Passed, The High Corporate Tax Burden Harmed Economic Growth, Investment, And The Wages Of U.S. Workers. "A sensibly designed territorial system would improve U.S. international competitiveness. Finally, the repatriation tax policy would contribute to reducing the corporate tax burden at a time when the high U.S. rate harms economic growth, the amount and quality of U.S. investment, and the wages of U.S. workers." (Douglas Holtz-Eakin, "The Need for Pro-Growth Corporate Tax Reform," Unites States Chamber Of Commerce , 8/11)

A National Bureau Of Economic Research Study Found That High Corporate Income Taxes Depress Union Wages. "High corporate income taxes reduce the after-tax profits of firms earning rents, which are the same firms that are in positions to pay above-market wages to their employees. Since high taxes mean that there is less for everyone, it can hardly be surprising that high taxes ultimately depress union wages, particularly in capital-intensive industries where corporate taxes have the most impact on a firm's bottom line." (R. Alison Felix and James R. Hines Jr, "Corporate Taxes And Union Wages In The United States," National Bureau Of Economic Research , 8/09)

In A Study Focused On Manufacturing Firms, Research Found That "Wages Fall 1 Percent In Response To A 1 Percent Increase In The Corporate Tax Rate." "Labor's burden from the corporate tax is predicted to be 2 to 2.5 times as large as the tax revenue collected in an open economy (Harberger 1995). Several recent studies use empirical analysis to determine the effect of national corporate taxes on wages.15 Research on manufacturing firms found that wages fall 1 percent in response to a 1 percent increase in the corporate tax rate." (Alison Felix, "Do State Corporate Income Taxes Reduce Wages?," The Federal Reserve Bank Of Kansas City , 2009)

LIE #3: THE TAX CUTS AND JOBS ACT HURTS SMALL BUSINESSES

Democrats Have Falsely Claimed The Tax Cuts And Jobs Act Hurts Small Businesses

Senator Elizabeth Warren (D-MA) Claimed That The Republican Tax Relief Plan "Does Nothing To Level The Planning Field" For Small Business. "If the Republicans in Congress think this plan helps small businesses, then they don't know anything about small businesses. This plan does nothing to level the planning field and it does nothing to address the real problems that small businesses face. In fact, it makes their challenges harder." (Sen. Elizabeth Warren, Remarks At The Center For American Progress , Washington, D.C., 11/14/17)

Senator Maggie Hassan (D-NH) Claimed That The Senate Republican Tax Bill Would Hurt Small Businesses. "Senator Maggie Hassan (D-NH) released the following statement after voting against the Senate Republican tax bill, which will hurt hard-working Granite Staters and small businesses." (Press Release, "Senator Hassan: 'This Partisan Tax Bill Is A Giveaway to Corporate Special Interests,'" Sen. Maggie Hassan, 12/2/17)

Senator Tim Kaine (D-VA) Claimed That The Republican Tax Bill Does Not Put Small Businesses First . "For months, I've tried to convince Republicans to work with us on a tax reform bill that would actually put middle-class families and small businesses in Virginia first. Instead, they jammed through a bad bill that will raise taxes on millions of working Americans, explode the deficit, and raise health care premiums." (Press Release, "Kaine Statement On Passage Of Republican Tax Bill," Sen. Tim Kaine, 12/2/17)

Senator Debbie Stabenow (D-MI) Claimed That This Bill Does Not Support Small Businesses. "I've said from the beginning that we need tax reform that makes the tax system simpler, puts more money in your pocket, closes tax loopholes that send jobs overseas and supports small businesses and farms across Michigan. Unfortunately, that isn't at all what this Republican bill does." (Press Release, "Stabenow Statement Following Senate Vote On Republican Tax Bill," Sen. Debbie Stabenow , 12/2/17)

Sen. Jon Tester (D-MT) Said That He Supports Cutting Taxes For Small Business "But This Disastrous Plan Fails Montanans." "I have long supported cutting taxes for working families and small businesses, simplifying the tax code and cutting our national debt. But this disastrous plan fails Montanans, and it fails our future leaders. This tax scheme not only saddles future generations with more debt, it also raises taxes on Montana families in the long run, forces cuts to Medicare, and caps deductions that allow Montanans to keep more of their hard earned money in their wallets." (Press Release, "Tax Bill A Disastrous Plan, Fails Montana And Our Future," Sen. Jon Tester , 12/24/17)

In Reality, The GOP Tax Cuts Have Reduced The Tax Burden On Small Businesses And As A Result They Have Flourished Since The Bill Passed

Rob Hassett, An Attorney At Business Law Partners Said, In 2018 "Small Businesses Will Almost All See Their Taxes Decrease." "But, at least this year, small businesses will almost all see their taxes decrease, said Rob Hassett, an attorney at Business Law Partners - a change that could strengthen congressional Republicans going into the 2018 midterms." (Hannah Grabenstein, "Will Small Businesses Benefit From The New Tax Law?," PBS , 2/27/18)

"Many Small Business Owners Appear Poised To Benefit From The Tax Bill." "But overall, many small business owners appear poised to benefit from the tax bill, starting with the doubling of the standard deduction. About 80 percent of small business owners file as pass-through entities, Close said, which essentially means that they pay business taxes as an individual. When individual rates are slashed, small business owners pay less." (Hannah Grabenstein, "Will Small Businesses Benefit From The New Tax Law?," PBS , 2/27/18)

In March 2018, Just Three Months After GOP Tax Cuts Passed, The Number Of Business Owners That Rated Taxes As Their Number One Business Problem Fell To A 35 Year Low. "'It has been a remarkable 16 months for small business optimism,' said NFIB President and CEO Juanita Duggan. 'This is the first time in 35 years where the fewest number of small business owners have told us that taxes are their number one business problem. They've been so optimistic that they feel confident enough to raise wages and invest in their business, which grows the economy.'" ("Taxes Received The Fewest Votes Since 1982 As Top Problem For Owners," National Federation Of Independent Business, 4/5/18)

In May, The NFIB Small Business Optimism Index "Increased To The Second Highest Level In The NFIB Survey's 45-Year History." "The Small Business Optimism Index increased in May to the second highest level in the NFIB survey's 45-year history. The index rose to 107.8, a three-point gain, with small businesses reporting high numbers in several key areas including compensation, profits, and sales trends." ("Small Business Optimism Index Soars, Continuing Historic Run, Hitting Several Records In May," National Federation Of Independent Business , 5/18)

LIE #4: THE GOP TAX CUTS WILL BRING ABOUT ECONOMIC ARMAGEDDON

House Minority Leader Nancy Pelosi Warned That The GOP Tax Cuts Would Bring About "Economic Armageddon"

Rep. Nancy Pelosi Equated The Passage Of The GOP Tax Bill With "The End Of The World," And Economic "Armageddon" For The Working Class. "Rep. Nancy Pelosi (D-Calif.) hammered the Republicans' tax-code overhaul Monday evening as a culture-shaking economic 'armageddon' that would haunt the working class for years to come. Flanked by other top Democrats in the Capitol, the minority leader blasted Republicans for championing a tax proposal she equated to 'the end of the world.'" (Mike Lillis, "Pelosi Denounces GOP Tax Reform As 'Armageddon.'" The Hill , 12/4/17)

Six Months After The GOP Tax Cuts Were Signed Into Law The Economy Is Booming

With The Daily Economic News Mostly Positive, Democratic Warnings Of "Armageddon" In The Wake Of The Tax Cuts And Jobs Act "Sound Woefully Tone Deaf." "But, with daily economic news mostly positive (despite the latest swings of the stock market), earlier Democratic arguments that this bill would cause an "Armageddon" like disaster on the nation's economy sounds woefully tone deaf. Moreover, Republican-aligned groups have both outspent Democratic groups in messaging on the bill thus far, and have publicly committed to spending millions more in the coming months." (Amy Walter, "Defining The Terms Of The Tax Reform Debate," The Cook Political Report , 2/15/18)

The New York Times: The Economy Was In "Overdrive" In May. "The American economy roared into overdrive last month, delivering the strongest job gains since February. The report underscored other recent signs of strength, like robust personal income and spending data reported earlier this week. Indeed, by just about any measure, the labor market is very healthy. The unemployment rate for May was at lows not seen since the heady days of the dot-com bubble." (Nelson D. Schwartz, "U.S. Added 223,000 Jobs In May; Unemployment At 3.8%," The New York Times , 6/1/18)

The Unemployment Rate Decreased From 3.9 Percent To 3.8 Percent In May. ( Bureau Of Labor Statistics , Accessed 6/1/18)

  • "The Unemployment Rate Has Matched Its Lowest Point In Half A Century," The Only Other Time Since 1969 That Unemployment Was At 3.8 Percent Was In April 2000. "The unemployment rate has matched its lowest point in half a century. The Labor Department reported Friday that unemployment fell to 3.8% in May. The economy added 223,000 jobs, better than expected. Since 1969, the only other time unemployment has been this low was in April 2000." (Nathaniel Meyersohn, "Unemployment Rate Matches Lowest Point In Half A Century," CNN , 6/1/18)

Overview Of Recent Monthly Job Creation. ("Employment, Hours, And Earnings From The Current Employment Statistics Survey (National)," Bureau Of Labor Statistics , 6/1/18)

  • May: 223,000 Jobs Added
  • April: 159,000 Jobs Added
  • March: 155,000 Jobs Added
  • Feb: 324,000 Jobs Added
  • Jan: 176,000 Jobs Added
  • Dec: 175,000 Jobs Added
  • Nov: 216,000 Jobs Added
  • Oct: 271 000 Jobs Added

Consumer Confidence Hit A 17-Year High In May. "'Consumer confidence increased in May after a modest decline in April,' said Lynn Franco, Director of Economic Indicators at The Conference Board. 'Consumers' assessment of current conditions increased to a 17-year high (March 2001, 167.5), suggesting that the level of economic growth in Q2 is likely to have improved from Q1. (Press Release, "The Conference Board Consumer Confidence Index Increased In May," The Conference Board , 5/29/18)

LIE #5: THE TAX CUTS AND JOBS ACT WILL NOT HELP THE MIDDLE CLASS

Democrats Repeatedly Claimed That The Tax Bill Would Not Help The Average American

Democrats Have "Falsely Claimed" That The Bill Would Raise Taxes On A Significant Portion Of Middle-Class Families. "Democrats have falsely claimed that the bill would raise taxes on 'most working-class families' - only 6.5 percent of lower-income households will take a direct hit." (David Weigel, "Democrats See Backlash Over Republicans' Tax Bill As A Key To Winning In The Suburbs," The Washington Post , 11/19/17)

Democrats Were In Such A Rush To Condemn The GOP Tax Plan They "Spread Far And Wide The False Claim That Families Making Less Than $86,100 On Average Will Face A Hefty Tax Hike," When "Most Families In That Income Range Would Get A Tax Cut ." "In their haste to condemn the GOP tax plan, Democrats have spread far and wide the false claim that families making less than $86,100 on average will face a hefty tax hike. Actually, it's the opposite. Most families in that income range would get a tax cut. Any Democrat who spread this claim should delete their tweets and make clear they were in error." (Glen Kessler, "Senate Democrats Falsely Claim GOP Tax Plan Will Raise Taxes For Most Working-Class Families," The Washington Post, 11/2/17)

Senator Kirsten Gillibrand (D-NY) Said That The Senate GOP Tax Relief Bill "Doesn't Even Help The Middle Class." "And now, somehow, after years of talking about it, a massive tax bill has finally made its way to the Senate floor, and after all that talk, it doesn't even help the middle class." (Sen Kirsten Gillibrand, Remarks On The Senate Floor , Washington, D.C., 11/29/17)

Senator Schumer Claimed That The GOP Tax Plan Is "Pilfering" The Pockets Of Middle-Class Americans. "Working people in our country are struggling. Corporations and the very wealthy are doing great. There is no reason for rushing through a tax break for millionaires and billionaires, paid for by pilfering the pockets and the healthcare of middle-class Americans. Millions of middle class families will get a tax hike next year, and millions more thereafter because of this bill." (Sen. Chuck Schumer, Remarks On The Senate Floor , 12/1/17)

In Reality, 82 Percent Of Middle Class Earners Will See A Tax Cut In 2018

The Washington Post Gave The Claim That The GOP Tax Bill Would Raise Taxes On All Middle-Class Families Four Pinocchios. (Glen Kessler, "Senate Democrats Falsely Claim Gop Tax Plan Will Raise Taxes For Most Working-Class Families," The Washington Post, 11/2/17)

Thanks To The Tax Cuts And Jobs Act, 82 Percent Middle-Income Americans Will See A Tax Cut In 2018. "In the middle income-quintile, 82 percent will receive a tax cut and 9 percent will have a tax increase." (Frank Sammartino, Philip Stallworth, and David Weiner, "The Effect Of The TCJA Individual Income Tax Provisions Across Income Groups And Across The States," Tax Policy Center , 3/28/18)

Lower-Middle-Class Households Will See The Largest Tax Cut As A Percentage Of Their Income. "The Republican tax plan would lead to tax cuts for all income groups in 2019, with the lower-middle-class households receiving the largest tax reductions on a percentage basis but upper-income households receiving the most money." (Siobhan Hughes, "Government Analysis Shows 8% Overall Tax Cut In 2019 Under GOP Plan," The Wall Street Journal , 12/18/17)

LIE #6: THE TAX CUTS AND JOBS ACT IS REGRESSIVE

Democrats Have Hammered The GOP Tax Bill For Not Being Progressive

Sen. Chuck Schumer (D-NY) Said, "In My Long Career In Politics, I Have Not Seen A More Regressive Piece Of Legislation." "In my long career in politics, I have not seen a more regressive piece of legislation, so devoid of a rationale, so ill-suited for the condition of the country, so removed from the reality of what the American people need." (Sen. Chuck Schumer, Remarks On The Senate Floor , Washington, DC, 12/1/17)

Bernie Sanders Slammed The GOP Tax Bill Saying That The Rich "Must Begin Paying Their Fair Share Of Taxes." "Sanders' response? No way. 'The Republicans are so desperate to spin their disastrous tax plan that they have resorted to taking comments I recently made completely out of context,' Sanders said in a statement. 'Instead of this grossly obscene piece of legislation, let's pass tax reform that permanently benefits all middle-income and working-class families without giving tax breaks to the top 1 percent. Instead of providing huge tax breaks to the rich and large corporations that explode the deficit, which this bill does, millionaires, billionaires and large, profitable corporations must begin paying their fair share of taxes.'" (David Weigel, "Bernie Sanders To Republicans: Stop Saying I Support Your Tax Bill," The Chicago Tribune , 12/29/17)

However The Tax Cuts And Jobs Act Actually Makes The Tax Code More Progressive

In 2018, Under The New Law The Top 20 Percent Of Households Will Pay 87 Percent Of Income Taxes, Compared To 84 Percent Under The Old Law. "The results show how steeply progressive the U.S. income tax remains. For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. But they will pay about 87% of income taxes, up from about 84% last year." (Laura Saunders, "Top 20% Of Americans Will Pay 87% Of Income Tax," The Wall Street Journal , 4/6/18)

  • The Lower 60 Percent Of Households Will Pay No Net Federal Income Tax In 2018 Vs 2 Percent Last Year . "By contrast, the lower 60% of households, who have income up to about $86,000, receive about 27% of income. As a group, this tier will pay no net federal income tax in 2018 vs. 2% of it last year." (Laura Saunders, "Top 20% Of Americans Will Pay 87% Of Income Tax," The Wall Street Journal , 4/6/18)

America's Tax Code Is Very Progressive And The GOP Tax Cuts "Didn't Change That Fact. In 2018, Top Earners Will Pay A Higher Share Of Income Taxes." "One of the least discussed parts of America's income tax is how progressive it is, and the tax overhaul didn't change that fact. In 2018, top earners will pay a higher share of income taxes." (Laura Saunders, "Top 20% Of Americans Will Pay 87% Of Income Tax," The Wall Street Journal , 4/6/18)

Thanks To The Tax Cuts And Jobs Act, Lower Income Earners To Pay A Smaller Share Of The Overall Tax Burden. "If the legislation is enacted, higher earners will pay an even larger share of the overall income tax burden than they do now. Our highly 'progressive' income tax will be even more progressive. That approach is counter to sound fiscal governance and undermines the growth potential of tax reform, but that is what Republicans are delivering." (Chris Edwards, "Final Tax Bill: Biggest Cuts For The Middle," Cato Institute , 12/19/17)

 


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