House GOP Tax Plan Moves Forward: 5 Key Takeaways
Shortly after President Trump’s left for his 12-day trip to Asia, Speaker Paul Ryan and the House Republicans gained a legislative victory at home: passing a tax bill. Heading into the vote, there was much anticipation on whether the bill would continue giving tax cuts to the wealthy and big corporations or if it would deliver much-desired tax cuts to the middle, working class.
As the GOP’s tax plan moves forward, here are 5 things you need to know.
Big corporations reap the biggest benefits. Thursday’s revelation of the bill saw the rate that large corporations are required to pay lowered from 35 to 20 percent. Gary Cohn, Trump’s chief economic advisor, said the move to lower the burden on corporations “would make America competitive with the rest of the world,” in an interview with Business Insider.
Cohn and other members of the Trump administration support trickle-down economics — a theory that states that giving tax cuts to corporations will encourage investors and entrepreneurs to invest more, stimulating the economy as a result.
College student benefits are significantly reduced. Under the GOP’s bill, tax benefits for college students would decrease by $65 billion over the next 10 years, according to the American Council on Education. The U.S. has accumulated more than $1.45 trillion in student loan debt, and this element of the bill would put a large burden on middle class families who depend on government benefits to send their children to college.
It is one of many talking points of the upcoming 2018 election. As the bill moves onto the Senate Finance Committee for further review and revisions, Republicans in Congress will have to argue over popular Obama-era proposals and laws, like the Affordable Care Act’s. The GOP’s tax bill looks to repeal an especially popular element of the legislation — the individual mandate requirement. This move follows Congress’ failure to repeal and replace Obamacare.
Support for the bill isn’t strong. According to a new Quinnipiac University poll, 52 percent of voters disapproved of the Republican tax proposal while 26 percent supported it. The poll also said that 64 percent of voters agreed that the plan would mostly help the rich while 24 percent said that it would primarily benefit the middle class.
Middle class families continue to suffer. As the Tax Foundation notes, Americans earning between $20,000 and $100,000 would be hit with higher tax bills, contradicting Trump’s promise made shortly after his election victory in which he said “the forgotten men and women of this country will never be forgotten again,” alluding to the middle class.
Republicans’ approval of the tax plan sent the bill to the Senate Finance Committee, which voted along party lines to advance the GOP tax proposal. A full Senate vote on the bill is expected to come after Thanksgiving. Though the GOP’s tax plan has come a long way, Republicans are sure to face many challenges as the bill advances through Congress.