Republicans don’t even have a tax reform bill yet, but the grumbling over their plans has already begun.
Sen. Rand Paul (R-KY), whose objections to the Graham-Cassidy bill helped doom Republicans’ latest attempt at Obamacare repeal last month, expressed incredulity Monday that the GOP’s tax reform framework could end up raising taxes on many in the middle class.
The framework itself, crafted by top Trump administration officials along with congressional leaders and committee chairs and released last week, punts on many controversial details that need to be resolved for any bill to be released.
But it’s clear that Paul finds what’s already in the framework troubling enough. He links to a Tax Policy Center report that finds that according to what we know is in the plan so far, “by 2027, taxes would rise for roughly one-quarter of taxpayers, including nearly 30 percent of those with incomes between about $50,000 and $150,000.”
Part of this is because the GOP plan would repeal the current deduction for state and local taxes. But part of it, per the TPC, is because the framework “would replace personal exemptions, which are indexed for inflation,” with other new credits that are not indexed for inflation. As a result, they write, “the number of taxpayers with a tax increase rises over time.” (Dylan Matthews has more on the report here.)
It seems like dangerous politics for Republicans to propose raising taxes on many middle-class taxpayers while cutting them for corporations and the top 1 percent of income earners. And if that is indeed how the party’s eventual bill looks, Paul surely won’t be the only one with concerns.
As it is, he’s sounding the alarm early, and signaling that he won’t go along with just anything party leaders sell as “tax reform.” That’s bad news for Republican leaders in Congress, who have little margin for error as they seek to round up the votes necessary to get something passed.