It’s clear who the GOP is most interested in impressing tonight: special interest billionaires like the Koch brothers who could bankroll their campaigns and super PACs. Across the debate stage, every single Republican candidate has a tax plan that slashes rates for the uber-wealthy at the expense of working people and middle class families.
No matter who “wins” the debate tonight and eventually secures the nomination — the Koch brothers and the rest of the GOP field’s special interest billionaire backers are guaranteed the promise of a massive increase in their after-tax incomes if they successfully buy the White House — while working families and the middle class are left behind.
More on the Republican field’s plans to give a big boost to their billionaire backers:
Marco Rubio’s tax plan would gift “the top 1 percent…tax cuts more than 103 times larger than the poorest 20 percent.” And totally eliminating taxes on investment income — Rubio’s biggest gift to the wealthy — is a huge giveaway for his Wall Street “megadonors” like Paul Singer, but does nothing for working families. Rubio’s proposal would also cost $11 trillion — three times the size of the Bush tax cuts — and would dramatically grow the budget deficit.
Despite Jeb Bush’s claims of a “populist” approach, Jeb’s own plan would similarly use big cuts to capital gains taxes to benefit the wealthy few over the middle class. The increases in after tax-income would go to the top 1% — Jeb himself would receive a $800,000 after-tax boost. And to his dubious credit, he hasn’t tried to spin it, affirming: That’s “just the way it is.”
Ted Cruz’s extremely regressive flat-tax proposal would require that middle-class income earners pay a greater percentage of their income than they do at present, but pad the pockets of his billionaire donors — increasing the the wealthiest’s after-tax income by 29.6%.
Donald Trump, meanwhile, plans to drop the income tax rate for the wealthiest Americans to its lowest level since 1931. His massive cuts for the wealthy would, over a decade, add up to $10 trillion in lost government revenue, but only give “minimal” tax cuts to lower-income Americans.
Background:
Rubio’s Tax Plans Benefit The Rich Over The Middle Class
Rubio’s Presidential Tax Plan Favored The Wealthy Over THe Middle Class
Rubio’s Revised Tax Plan Favors The Wealthy
Citizens For Tax Justice HEADLINE: “Marco Rubio’s Tax Plan Gives Top 1% An Average Tax Cut Of More Than $220,000 A Year.” [Citizens For Tax Justice, 11/3/15]
Citizens For Tax Justice: Under Rubio’s Plan, More Than A Third Of Tax Cuts Would Go To The Top 1 Percent; The Poorest 20 Percent Of Americans Would Receive An Average Tax Cut Of $2,168 Per Year While the Best Off 1 Percent Would Receive An Average Tax Cut Of $223,783. According to Citizens For Tax Justice, “Under Rubio’s plan, every income group would receive a tax cut. […] Overall, we found that: The poorest 20 percent of Americans would receive a tax cut averaging $2,168 a year (assuming full refundability of the standard credit). Middle-income Americans would receive an average tax cut of $2,859. The best-off one percent of taxpayers would enjoy an average tax cut of $223,783. More than a third of the tax cuts (34 percent) would go to the top one percent.” [Citizens For Tax Justice, 11/3/15]
Rubio’s Revised Tax Plan Does Not Balance The Budget Without Draconian Cuts
National Review Senior Editor Ramesh Ponnuru: “But The Revenue Loss Rubio Is Proposing Is Huge” And “Six Trillion Dollars, Though, Is The Sort Of Number That Could Make People Notice.” In a Bloomberg op-ed Ramesh Ponnuru wrote, “But the revenue loss Rubio is proposing is huge. American voters are not usually obsessed with balancing the budget: If they were, we wouldn’t have run the deficits we have over the past several decades. Six trillion dollars, though, is the sort of number that could make people notice. It would be irresponsible, given our looming debt problems, to cut taxes by that much and hope that spending cuts and economic growth would save the day. Voters might well think the same thing.” [Bloomberg, 10/28/15]
National Review Senior Editor Ramesh Ponnuru: Rubio’s Revised Plan “Also Makes His Original Plan’s Biggest Drawback Even Worse” And That The Changes He Made Would “Add To The Deficit More.” In a Bloomberg op-ed Ramesh Ponnuru wrote, “Senator Marco Rubio had a tax-reform plan that made him stand out from the Republican pack this primary season. He has apparently concluded that he stood out too far. The revised version he’s now offering would still be a major improvement over current tax law in many respects. Unfortunately, it also makes his original plan’s biggest drawback even worse. […]The net effect of these changes would be to simplify the tax code a little less, and add to the deficit more. ” [Bloomberg, 10/28/15]
Jared Bernstein: “We Can Be Certain That The Rubio Plan Will Hemorrhage Revenues While Bequeathing A Massive Gift Of Wealth To The Top 0.0003 Percent.” In a Washington Post op-ed Jared Bernstein wrote, “Either way, we can be certain that the Rubio plan will hemorrhage revenues while bequeathing a massive gift of wealth to the top 0.0003 percent.” [Washington Post, 11/5/15]
In Order To Balance The Budget, Rubio’s Plan Would Lead To Draconian Cuts To Social Services
Vox HEADLINE: “Marco Rubio (And Every Republican) Is Hiding His Tax Cut’s True Effect On The Poor.” [Vox, 11/5/15]
Citizens For Tax Justice: “Rubio’s Plan Hugely Favors The Wealthy” And “His Plan Will Require Draconian Cuts To Essential Public Services And Likely Wreck Our Economy.” According to Citizens For Tax Justice, “‘By eliminating personal taxes on capital gains and other investment income, repealing the estate tax and cutting the corporate income tax by about half, Rubio’s plan hugely favors the wealthy,’ said CTJ Director Bob McIntyre. ‘And by reducing revenues by almost $12 billion over a decade, his plan will require draconian cuts to essential public services and likely wreck our economy.’” [Citizens For Tax Justice, 11/3/15]
Ezra Klein: “So All The Analyses Right Now [Of Rubio’s Tax Plan] Are Essentially Assuming This Is Fun, Free Money Rubio Is Handing Out — Which It Isn’t.” In a Vox blog, Ezra Klein wrote, “So all the analyses right now are essentially assuming this is fun, free money Rubio is handing out — which it isn’t.”[Vox, 11/5/15]
Rubio’s Plan Was Even Worse For The Poor And Middle Class Than Originally Scored Because Rubio Changed His Explanation To Remove A “Basic Income” Tax Refund For Those Who Do Not Pay Any Taxes
Rubio’s Original Tax Plan Seemed To Force Taxpayers To Pay For A New Social Welfare Program For Those Who Did Not Pay Any Taxes
Dylan Matthews: Rubio’s Original Proposal, As Laid Out, Would Institute A “Basic Income;” In Which Every Household Would Get A $2,000 Or $4,000 Credit. In a Vox blog, Dylan Matthews wrote, “How is Rubio helping the poor so much? Well, Rubio’s plan would replace the standard deduction and personal exemption with a $2,000 credit ($4,000 for couples). That’s a big increase. Currently, for a couple in the bottom, 10 percent tax bracket, the standard deduction and personal exemption is worth a maximum of $2,040. A $4,000 credit is a near doubling of that. That helps people at the bottom end — but only somewhat. After all, many of the poorest Americans don’t owe any income taxesin the first place. In 2015, 40.4 percent of tax units will have a negative or zero income tax burden. That’s mostly the poorest Americans, and they’re not helped at all by a plain old credit” [Vox, 10/30/15]
The Tax Foundation, Which The Rubio Campaign Cited, Assumed Rubio’s Plan Included A Basic Income As Originally Proposed
Rubio Campaign Spokesman Cited The Tax Foundation Report To Defend Rubio’s Tax Plan. According to Twitter, @AlexConant tweeted, “President of Tax Foundation Says Marco Is Right; Harwood Was Wrong.” [Twitter, 10/28/15]
Dylan Matthews: The Tax Foundation’s Growth Analysis Assumed That Rubio’s Plan Included A “Basic Income;” Which Lead To The Group’s Conclusion That The Lee-Rubio Plan Would Be Highly Progressive. In a Vox blog, Dylan Matthews wrote, “Here’s the problem, though: The Tax Foundation assumed that Rubio had proposed a basic income. ‘The Tax Foundation assumed the proposal would make the new personal credit ($2,000 for singles and $4,000 for married couples) fully refundable,’ Burman wrote. ‘This assumption helps explain why the group concluded the Lee-Rubio plan would be highly progressive.’” [Vox,10/30/15]
Rubio’s Campaign Said That Was A Mistake And That His Plan Would Not Provide A Basic Income For Everyone
Dylan Matthews: Rubio’s Team Insisted That The “Basic Income” Wording Was A Mistake; And That Paperwork Would Be Filed To Prevent Non-Working Filers From Receiving A Tax Credit. In a Vox blog, Dylan Matthews wrote, “So it’s perhaps no surprise that when I asked his team about this, they insisted that this was a mistake, and the credit was in fact much more limited. ‘Rules would be tailored to ensure that our reforms would not create payments for new, non-working filers,’ a Rubio aide told me in April. It’s unclear what exactly that means, especially since the aide insisted that the tax was nonetheless refundable. But one thing it definitely does mean is that millions of people who would’ve benefited from a simple $2,000 to $4,000 refundable credit won’t benefit under Rubio’s actual plan.” [Vox, 10/30/15]
Rubio’s Updated Plan Still Included Wording That Would Result In Everyone Receiving A Tax Credit, Regardless If They Paid Taxes
Kevin Drum: Even After It Was Updated, Rubio’s Tax Plan Still Included A “Basic Income” Policy In Which Everyone Would Receive A Tax Refund Regardless If They Paid Taxes. In a Mother Jones blog, Kevin Drum wrote, “This is ridiculous. Marco Rubio says that percentage-wise his tax plan is more favorable to the poor than the rich, and both left and right-leaning tax groups agree. But—this is only because Rubio’s plan includes a new $2,000 fully refundable personal tax credit. For those of you not in the know, ‘refundable’ means you get it even if you don’t owe any taxes. So if you’re poor, and your tax bill is already zero, you get a check for $2,000 from Uncle Sam. […] But is this really Rubio’s plan? After last week’s debate, a Rubio spokesman told Vox, ‘Rules would be tailored to ensure that our reforms would not create payments for new, non-working filers.’ So….maybe the credit isn’t fully refundable? Perhaps Rubio will update his plan to explain. Well, he did update his plan, and here’s what it now says: Creates a new $2,000 (individual) / $4,000 (married filing jointly) refundable personal tax credit in place of the standard deduction: Credit phases out beginning above $150,000 (individual) / $300,000 (married filing jointly) and would be unavailable to taxpayers with an annual income in excess of $200,000 (individual) / $400,000 (married filing jointly). So Rubio took the time to specifically say that his tax credit would phase out at high levels, which makes almost no difference to anyone. But his update continues to say, without qualification, that his tax credit is refundable. This means that everyone gets a $2,000 check regardless of their tax bill.” [Mother Jones, 11/3/15]
If Rubio’s Tax Proposal Does Not Include A Basic Income, Then The Supposed Benefits For The Poor “Would Go Down Significantly.”
Bob McIntyre, Citizens For Tax Justice: If Rubio Limited The Tax Cut To Exclude Many-Low Income, Non-Taxpayers Then The Reported Share Of The Tax Cut For Low-Income People “Would Go Down Significantly.”
In a Huffington Post op-ed Jonathan Cohn wrote, “However, CTJ director Bob McIntyre told The Huffington Post, ‘if [Rubio] were to find a way to successfully limit the tax cut to exclude many low-income people, then the share of the taxcut for low-income people would go down significantly.’” [Huffington Post, 11/5/15]
Rubio-Lee Plan Favored The Wealthy While Raising Taxes On The Middle Class
Enormous Tax Breaks Would Go To Highest Earners
Bloomberg: “Even The [Rubio-Lee] Plan’s Proponents Concede It Would Reduce Tax Collections By At Least $1.7 Trillion In The First Decade, Largely Favoring The Top 1 Percent Of Americans Over The Middle Class.” According to Bloomberg “Senator Marco Rubio of Florida kicked off the competition with his plan to boost economic growth by slashing taxes on investments, wages and business income. Even the plan’s proponents concede it would reduce tax collections by at least $1.7 trillion in the first decade, largely favoring the top 1 percent of Americans over the middle class.” [Bloomberg, 3/12/15]
Rubio – Lee Tax Plan Added Tax Cuts For Top Income Earners. According to an Off The Charts blog by Chuck Murr in Center on Budget And Policy Priorities, “The new plan essentially takes the old plan (which set tax rates of 15 and 35 percent and eliminated many deductions as well as the individual and corporate alternative minimum taxes) and adds more tax cuts for those at the top. To understand their impact, it’s helpful to grab a copy of the IRS’s tax information on the country’s richest 400 filers:” [Center on Budget And Policy Priorities, 3/14/15]
Rubio’s Tax Plan Was Called “Sure Budget Busting Giveaway For The Super Wealthy” By Hillary. According to ABC News, “Hillary Clinton wants you to know her economic policy will be nothing like those proposed by the GOP. While delivering her first major economic policy speech of her campaign, Clinton today called outJeb Bush, Marco Rubio and Scott Walker by name to contrast her policies — focused on strengthening the middle class and increasing wages — against those of her front-running Republican rivals. […] Clinton then went after Florida Sen. Marco Rubio, calling his tax reform plan a ‘sure budget busting giveaway for the super wealthy.” [ABC News, 7/13/15]
Center On Budget And Policy Priorities: Rubio – Lee Tax Plan Was “Outrageously” Tilted In Favor Of The Country’s High-Income Earners. According to an Off The Charts blog by Chuck Murr in Center on Budget And Policy Priorities, “The new tax plan from Senators Mike Lee (R-UT) and Marco Rubio (R-FL) builds on Senator Lee’s 2014 plan and creates something that’s even more tilted — outrageously so — in favor of the country’s highest-income people and likely much more fiscally irresponsible. And, like last year’s plan, it not only excludes most working-poor families from its new child tax credit but allows much of their existing child credit to disappear after 2017.” [Center on Budget And Policy Priorities, 3/14/15]
Some Middle Class Families Could Be Exposed To “A Significant Tax Hike”
Washington Post: Rubio’s Tax Proposal “Includes A Huge Tax Break That All-But Bypasses The Middle And Greatly Boosts The Rich.” According to a blog post by Jim Tankersley in the Washington Post, “If he wins his party’s nomination, though, Rubio will have to defend a tax plan that, while said to address the challenges of the middle class, includes a huge break that all-but bypasses the middle and greatly boosts the rich. It was a tax plan that was even too large for Romney himself to run on.” [Washington Post, 4/14/15]
Rubio – Lee Tax Plan Raised Taxes On Some Lower- And Middle- Income Families.According to Salon, “Let’s start with Rubio’s own tax plan, which will have to be tweaked a bit since it raises taxes on some lower- and middle-income families. Once he irons out those kinks, what he’ll be left with is a plan that eliminates all manner of taxes on rich people (capital gains, estate taxes, etc.) and throws some new tax credits at the middle class, the combined effect of which will be to rip an unprecedentedly large hole in the federal budget. Rubio would like to pretend that the shortfalls will be made up for by the rapid economic growth generated by the tax cuts, but there is no reason to believe that would happen.” [Salon, 4/29/15]
Politico: Rubio-Lee Plan Had Potential To Expose “Middle-Income Earners To A Significant Tax Hike.” According to Politico, “But not all Republicans are embracing the plan… And they note that it would apply the 35 percent rate to individual incomes as low as $75,000, possibly exposing many middle-income earners to a significant tax hike.” [Politico, 4/9/15]
Tony Nitti Op-Ed: Rubio-Lee Tax Plan Meant That “Middle-Class Taxpayers Currently Paying Tax At A Top Rate Of 25%, 28% Or 33% [Would] See Their Marginal Rate Rise.”According to an opinion piece by Tony Nitti in Forbes, “On the other end of the spectrum, you’ll have a large range of taxpayers whose marginal rate will increase as a result of the proposed change. Under current law, the 35% tax bracket doesn’t kick in until income exceeds $411,500; under the Rubio-Lee proposal, it would take effect at only $75,000 for single taxpayers and $150,000 for married filing jointly. This means that middle-class taxpayers currently paying tax at a top rate of 25%, 28% or 33% will see their marginal rate rise. Of course, other changes to the proposal may well mitigate this rate increase; but people are rarely interested in the details of tax reform. In all likelihood, the headline-maker of this Republican plan will be the decrease in the top rate for the richest 1% and the increase to the middle class, and that may make the plan a tough sell.” [Forbes – Tony Nitti, 3/8/15]
Vox: “Families Lose Out” On Rubio-Lee’s Tax Plan. According to Vox, “The current tax code has seven income tax rates for individuals, ranging from 10 percent to 39.6 percent. Rubio and Lee reduce that to just two: 15 percent for income below $75,000 (or $150,000 for couples), and 35 percent for all income above that. That amounts to a tax increase for certain income segments and a cut for others. Roughly speaking, low-income and rich but not super-rich individuals and families lose out while slightly less rich and even richer ones gain. The 15 percent rate is more than the current 10 percent bottom rate, hurting low-income people (though the plan corrects for this a bit — more on that in a sec). Some middle-income people paying the 25 percent rate today will see it knocked down to 15. Then again, some people paying top rates of 28 or 33 percent today will be kicked up into the 35 percent bracket, while the richest taxpayers will see their top rate fall from 39.6 percent to 35 percent.” [Vox, 3/17/15]
Rubio-Lee Plan Would Not Increase Refunds For Lower Income Workers
Isabel Sawhill, Budget Expert At The Brookings Institution: The Rubio-Lee Proposal Would Not Add Refunds To Lower-Income Workers. According to Politico, “The credits are only refundable against income tax and payrolltaxes. Low-income workers that already collect the Earned Income Tax Credit and Child Tax Credit typically already get breaks above and beyond the taxes they pay so the Rubio and Lee plan wouldn’t add anything to their refund. ‘It is a big increase in the child tax credit for middle-class families and above but doesn’t help anyone at the bottom,’ Sawhill said. ‘Low-income families don’t have enough payroll and income tax liability to make them eligible for it.’” [Politico, 3/3/15]
Rubio-Lee Child Tax Credit Plan Would Hurt Working Families
“Millions” Of Working Families Would Lose Their Existing Child Tax Credit After 2017
Center On Budget And Policy Priorities: Rubio-Lee Tax Plan Could Cause “Millions Of Low-Income Working Families To Lose All Or Part Of Their [Child Tax] Credit” By Allowing A Key Provision To Expire After 2017. According to Center On Budget And Policy Priorities, “More importantly, Lee-Rubio would let a key provision of the current Child Tax Credit expire after 2017, causing millions of low-income working families to lose all or part of their credit. The provision in question — under which the Child Tax Credit begins to phase in as family earnings rise above $3,000, rather than being unavailable until family earnings reach nearly $15,000 — is currently in effect through 2017; it needs to be made permanent. Ron Haskins, who as a senior Republican congressional staffer was a lead architect of the 1996 welfare law and later served as an adviser to President George W. Bush before joining the Brookings Institution, urged in recent congressional testimony that this provision be made permanent. Haskins called it ‘an important part of the work-based safety net’ and noted that if it’s allowed to expire after 2017, ‘working families with children will lose billions of dollars and a substantial amount of work incentive.’ He observed that this ‘is one policy that both encourages work and attacks inequality directly by boosting the income of low-income workers.’ Yet Lee-Rubio lets the provision end after 2017.” [Center On Budget And Policy Priorities, 3/11/15]
Eliminating Investment Income Taxes Would Benefit The Rich
Cutting Taxes On Investment Income “Disproportionately” Benefitted The Wealthy.According to the Washington Post, “The latest version of Rubio’s tax plan, which he released with fellow Sen. Mike Lee (R-Utah) in March, shrinks the income tax down to two rates, lowering the top rate in the process, and includes new tax breaks for working families. It also eliminates all taxes on dividends and capital gains. That’s where rich taxpayers cash in. They are overwhelmingly the ones in the economy who draw income from capital, such as holdings and sales of stocks. ‘The benefits of low tax rates on capital gains accrue disproportionately to the wealthy,’ the non-partisan Tax Policy Center has written. ‘In 2013, an estimated 94 percent of the tax benefit of low rates on capital gains will go to taxpayers with cash incomes over $200,000, and three-fourths of the benefits will accrue to millionaires.’” [Washington Post,4/14/15]
Plan Would Increase The Deficit
Rubio’s Tax Plan Would Reduce Revenue By $1.7 Trillion. According to Bloomberg, “Senator Marco Rubio of Florida kicked off the competition with his plan to boost economic growth by slashing taxes on investments, wages and business income. Even the plan’s proponents concede it would reduce tax collections by at least $1.7 trillion in the first decade, largely favoring the top 1 percent of Americans over the middle class.” [Bloomberg, 3/12/15]
Avik Roy: Rubio-Lee Tax Plan Has “A Ton Of Problems.” In a column for Forbes, Avik Roy wrote, “Now, I’m a card-carrying reformocon, but I see a ton of problems with the Lee-Rubio child tax credit. First of all, there’s no empirical evidence that the plan would actually lead to the production of future taxpayers. Most of the tax credits would go to parents who’ve already borne children and have no interest in bearing more. Furthermore, to the degree that the credit incentivizes more childbearing, it may increase out-of-wedlock births. Numerous studies indicate that children born out of wedlock have a far higher risk of living their lives in poverty: net recipients, not financiers, of the entitlement state.” [Forbes, 5/25/15]
Vox: “Rubio’s Strategy Is Reminiscent Of George W. Bush’s. He’s Proposing Massive Tax Cuts With No Real Way To Pay For Them […]” In a Vox blog, Ezra Klein wrote, “Rubio’s strategy is reminiscent of George W. Bush’s. He’s proposing massive tax cuts with no real way to pay for them, and he’s suggesting he won’t really need a way to pay for them because they’ll unleash so much economic growth they’ll eventually just pay for themselves. While Rubio gives some lip service to deficit reduction — he later tells Harwood that balancing the budget will require entitlement reform, not just tax reform — he clearly cares a lot more about the tax cuts than about the deficit reduction, just as Bush did.” [Vox, 10/6/15]
Editorial: “Rubio Is Singing The Same Tired Old GOP Song When It Comes To Tax Cuts.” In an editorial The Gainesville Sun wrote, “For supposedly being a new kind of Republican, Sen. Marco Rubio is singing the same tired old GOP song when it comes to tax cuts. […] In his book ‘American Dreams’ and on the stump, he has proposed an economic plan that he claims will help ordinary Americans like his parents rather than just the super-rich. Unfortunately, the plan includes tax cuts that the Associated Press reported last week would drive up the debt by as much as $4 trillion over the first decade — forcing further cuts to programs that benefit an aging population and the poor. […] Rubio’s plan would also reduce all corporate taxes to 25 percent, replace most deductions with a credit of up to $2,000 per filer, and expand the child tax credit to $2,500, the AP reported. A piece in the New York Times in March referred to Rubio’s proposal as the ‘Puppies and Rainbows Tax Plan’ because it provides goodies all around without accounting for how the trillions in lost revenue will be made up. […] Rather than being a different kind of Republican, Rubio is just following in President Ronald Reagan’s tradition of backing big tax cuts and military budget increases that result in a ballooning debt.” [Gainesville Sun, 5/15/15]
Bush’s Tax Plan Focus On The Top 1% Instead Of The Middle Class
Bush’s Tax Plan Primarily Benefited The Top 1%
Wall Street Journal: Top 1% Are Biggest Winners in Jeb Bush’s Tax Plan [Wall Street Journal, 9/10/15]
Tax Foundation Analysis: “The Biggest Percentage Increases In After-Tax Income Under Mr. Bush’s Tax Plan Would Go To The Top 1% Of Earners, People Making More Than About $406,000.” According to the Wall Street Journal, “Jeb Bush has been highlighting the benefits of his new tax plan for the middle class, which in many cases are considerable. But by some measures the biggest winners would be – well, winners. A new analysis by the business-backed Tax Foundation shows that the biggest percentage increases in after-tax income under Mr. Bush’s tax plan would go to the top 1% of earners, people making more than about $406,000. They would see their after-tax incomes increase on average by 11.6%, according to the analysis. That’s the biggest change for any income group.” [Wall Street Journal, 9/10/15]
Tax Foundation Analysis: “The Benefits To The Top 1% Would Be Even Higher When The Full Economic Impacts Of The Change Are Considered.” According to the Wall Street Journal, “The average for all income levels would be a 3.3% increase in income. The second-biggest beneficiaries would be folks in the top 10%, those making more than about $117,000. Their incomes would go up by 4.7%. The benefits to the top 1% would be even higher when the full economic impacts of the change are considered, according to the Tax Foundation analysis.” [Wall Street Journal, 9/10/15]
New York Magazine: “His Elimination Of The Estate Tax And Reductions In The Top Tax Rate Would Furnish The Rich With A Large Tax Cut. A Plan To Cut Taxes For The Rich Is Not A Departure From Long-Held Tenets Of Conservative Tax Policy. It Is Exactly That Policy.” According to New York Magazine, “And again, as a matter of simple math, even if Bush eliminated every possible deduction for the rich, his elimination of the estate tax and reductions in the top tax rate would furnish the rich with a large tax cut. A plan to cut taxes for the rich is not a departure from long-held tenets of conservative tax policy. It is exactly that policy. Which is why Bush has won the favor of the very people who have designed those policies in the past.” [New York Magazine, 9/9/15]
Huffington Post: “Jeb Bush Would Also Give Wealthy Americans A Massive Tax Break By Slashing Their Regular Income Tax Rate, And Grant Wall Streeters And Others Who Make Their Money On Securities A Separate Boon By Cutting The Capital Gains Tax Rate.” According to the Huffington Post, “But Jeb Bush would also give wealthy Americans a massive tax break by slashing their regular income tax rate, and grant Wall Streeters and others who make their money on securities a separate boon by cutting the capital gains tax rate — which applies to profits from stocks, bonds and real estate. About half of all capital gains flow to the top 0.1 percent of households, according to The Washington Post. Bush proposes cutting the capital gains rate for the wealthiest Americans from 23.8 percent to 20 percent. Even with the massive cut to the top income tax rate, the top capital gains rate would remain lower — a scenario that would continue to favor money earned from securities trading over traditional wages.” [Huffington Post, 9/9/15]
NPR: “Bush Would Eliminate The State And Local Income Tax Deduction, Which Overwhelmingly Benefits Higher Earners, And Cap The Amount Of Deductions A Filer Can Take, Which Also Would Affect Higher Earners More.” According to NPR, “But then, the plan would also eliminate some deductions and cap the amount that people can deduct, which would offset some of those rate reductions. For example, Bush would eliminate the state and local income tax deduction, which overwhelmingly benefits higher earners, and cap the amount of deductions a filer can take, which also would affect higher earners more.” [NPR,9/9/15]
FiveThirtyEight: “Despite The Lack Of Details, It’s Virtually Certain That Bush’s Proposals Would Result In Lower Taxes For Top Earners.” According to FiveThirtyEight, “Still, there are a few things that do seem clear about Bush’s plan: It would cut taxes for the rich: Despite the lack of details, it’s virtually certain that Bush’s proposals would result in lower taxes for top earners. Specifically, Bush wants to cut the tax rate on individuals earning more than about $190,000 and married couples earning more than about $230,000, based on the current earnings thresholds. (In all, he would reduce the number of brackets to three from seven, but it isn’t clear what the thresholds would be for each tier.) Bush would also eliminate the alternative minimum tax, which effectively limits how much high earners can lower their taxes through deductions and exemptions. And he would eliminate the estate tax — what Republicans call the ‘deathtax’ — which imposes a tax on large inheritances. Bush would offset those cuts to some degree by capping tax deductions, which disproportionately benefit higher earners. And he would apparently end — or at least limit — the so-called carried-interest loophole, which allows investment managers and some other wealthy Americans to treat some of their earnings as capital gains, which are taxed at a lower rate than ordinary income. The carried-interest change, in particular, could result in a higher tax burden for some financial professionals. But for the doctors, lawyers and corporate executives who make up the vast majority of top earners, Bush’s plan would almost certainly result in a sizable tax cut.” [FiveThirtyEight, 9/9/15]
Bush Said “That’s Just The Way It Is”
Jeb Bush: “Of Course, Tax Cuts For Everybody Is Going To Generate More For People That Are Paying A Lot More. I Mean That’s Just The Way It Is.” According to Politico, “The wealthiest Americans would receive sharply higher tax breaks under Jeb Bush’s tax proposal, the former Florida governor says, because they pay a disproportionate share of taxes in the first place. ‘The simple fact is 1 percent of people pay 40 percent of all the taxes,’ Bush said on ‘Fox News Sunday.’ ‘Of course, tax cuts for everybody is going to generate more for people that are paying a lot more. I mean that’s just the way it is.’” [Politico, 9/27/15]
Bush Would Have Saved $800,000 Under His Tax Plan
Washington Post: Under Jeb Bush’s Tax Plan, He Would Have Saved About $800,000 In 2013. According to the Washington Post, “As others have pointed out, Jeb Bush’s tax plan axes taxes for pretty much everyone, but especially for really, really rich people. Including, coincidentally, Jeb Bush. The Republican presidential candidate would make out like a bandit under his own plan. According to my quick-and-dirty, back-of-the-envelope calculations based on Bush’s 2013 tax return, his liability for that year would have fallen by about $800,000, or about a quarter of what he paid Uncle Sam.” [Washington Post, 9/10/15]
PolitiFact: “Mostly False” That Bush’s Plan Gives The Middle Class The Greatest Break of $2,000
PolitiFact: “Mostly False” That Jeb Bush’s Tax “Plan Actually Gives The Middle Class The Greatest Break: $2,000 Per Family.” According to PolitiFact, “Bush said, ‘My plan actually gives the middle class the greatest break: $2,000 per family.’ Middle-class families could potentially realize a higher percentage tax break, based on Bush’s plan. But that’s only counting those who would file their tax returns using the standard deduction, something the wealthy aren’t likely to do. Even with caps on itemized deductions, a range of experts said the wealthiest Americans stand to benefit more than the middle class, thanks to Bush’s proposed changes in corporate, estate and other taxes. Bush’s statement contains an element of truth but ignores critical facts that would give a different impression. We rate it Mostly False.” [PolitiFact, 11/5/15]
Jeb Bush’s Comparison Only Counted People Who Take The Standard Deduction When Filing Their Income Tax Returns; Because People With Higher Incomes Tend To Itemize, That Means The Sample Of Wealthy People To Which Jeb Bush Compared His Middle Class Savings Is Much Smaller Than It Could Be. According to PolitiFact, “But one caveat is that his comparison is only counting people who take the standard deduction when filing their income tax returns. Because people with higher incomes tend to itemize, that means the sample of wealthy people to which Bush is comparing his middle class savings is much smaller than it could be. Vanessa Williamson, a governance studies fellow at the Brookings Institution think tank, said roughly 90 percent of people making more than $100,000 per year itemize, and higher for people who earn more than that. Only about 58 percent of people making between $50,000 and $75,000 itemize. ‘Wealthier people are not, as a general rule, filling out the 1040EZ and calling it a day,’ said Williamson said. ‘The vast majority of high-income people itemize their taxes … and cut their taxes a great deal by doing so.’ (Think Warren Buffet paying just 17 percent.)” [PolitiFact, 11/5/15]
Citizens For Tax Justice: Middle Fifth Of Earners Would See A 3.2 Percent Change In Their Income, But The Top 1 Percent Would Realize A 10.2 Percent Benefit; Middle Income Families Would Be Getting $1,572 Back, But The Top 1 Percent Would Average More Than $177,000. According to PolitiFact, “Other analyses, however, show that the highest earners get a much bigger break than Bush has implied, because they would benefit disproportionately from changes like lowering corporate taxes and repealing the estate tax. One report by research group Citizens for Tax Justice, which advocates for tax fairness, said the middle fifth of earners would see a 3.2 percent change in their income, but the top 1 percent would realize a 10.2 percent benefit. They said middle income families would be getting $1,572 back, but the top 1 percent would average more than $177,000. The pro-business Tax Foundation examined the plan, too. A projection based on exceptionally robust growth showed middle earners saw their adjusted gross incomes go up as much as 12.9 percent over an unspecified length of time. The top 1 percent’s incomes would go up 16.4 percent.” [PolitiFact, 11/5/15]
Cruz’s Flat Tax Plan Would Be Massive Tax Cut To Wealthy At The Expense Of The Middle Class
Makes Middle Class Workers Pay A Larger Share
Syracuse University Professor Len Burman: A Flat Tax System Means Poor And Middle Class Individuals Paid A Larger Share Of Their Income Than Currently Required.According to an opinion piece by Syracuse University Professor Len Burman in Forbes, “A flat tax would be much more regressive than the current income tax. For one thing, it’s unlikely to include the refundable tax credits (like the EITC and child credit) that augment the earnings of low earners. It’s not impossible to add refundable credits, but I’ve never seen them in a flat tax proposal. As a result, poor people will pay a larger share of their income than they do at present. Middle-income people will also pay more.” [Forbes, 10/24/11]
Benefits The Rich The Most
The Wealthiest Americans Would Receive 28.4% More Money Than The Middle Class
Under Cruz’s Plan The Top 1% Of Americans Would Get 27.2 To 28.4 Percent More In After-Tax Income Than Middle Class Workers. According to the Tax Foundation, “Taxpayers in the bottom decile would see a 4.3 percent increase in after-tax income due to the expansion of the Earned Income Tax Credit, which more than offsets the impact of the new value-added tax. The next six deciles (the 10th through 70th percentiles) would see increases in after-taxadjusted gross income (AGI) of between 1.2 and 2.4 percent. High income taxpayers that fall in the highest income class (the 90-100 percent decile) would see an increase in after-tax income of 17.4 percent. The top 1 percent of all taxpayers would see a 29.6 percent increase in after-tax income.” [Tax Foundation, 10/28/15]
Wall Street Journal: “Cruz’s New Tax Plan Delivers Its Biggest Benefits To The Top 1%.”According to the Wall Street Journal, “Texas Sen. Ted Cruz’s new tax plan delivers its biggest benefits to the top 1% of U.S. households, adding about one-third to their after-tax income, according to an analysis released Thursday by the Tax Foundation.”
Cruz’s Plan Would Increase After-Tax Income For The Wealthiest Americans By 29.6%.According to the Wall Street Journal, “The analysis released today from the Tax Foundation, a Washington group with an economic model that projects that tax cuts yield significant economic growth, said the highest-income households would add 29.6% to their after-tax income and as much as 34.2% after assuming economic growth. That’s compared with the average benefit of 9.2% for all taxpayers or 21.3% after incorporating growth effects.” [Wall Street Journal,10/29/15]
After Economic Growth, The Highest-Income Households Could Receive A 34.2% Increase In After-Tax Income. According to the Wall Street Journal, “The analysis released today from the Tax Foundation, a Washington group with an economic model that projects that tax cuts yield significant economic growth, said the highest-income households would add 29.6% to their after-tax income and as much as 34.2% after assuming economic growth. That’s compared with the average benefit of 9.2% for all taxpayers or 21.3% after incorporating growth effects.” [Wall Street Journal, 10/29/15]
Syracuse University Professor Len Burman: A Flat Tax System “Inevitably” Exempted Most High Income Individuals From Taxes. According to an opinion piece by Syracuse University Professor Len Burman in Forbes, “Moreover, spending falls as a share of income as income rises. Low-income people spend all their income or more. High-income people spend only a tiny fraction. (See chart.) A VAT or flat tax inevitably exempts most of the income of high-income people from tax. If it is going to raise the same amount of revenue as the current system, it must raise somebody else’s taxes. That would be low- and middle-income people.” [Forbes, 10/24/11]
Cruz’s Plan Would Hurt The Economy To Benefit The Rich
Washington Post Editorial: “Mr. Cruz’s Plan Would Reduce Federal Revenue In Order To Give Huge Tax Cuts To The Wealthy.” According to an editorial in the Washington Post, “At A GOP debate in which candidates struggled to defend the math in their tax-cutting plans, Sen. Ted Cruz (Tex.) insisted that he can lower income tax rates to a flat 10 percent and still make ‘the numbers add up.’ In fact, Mr. Cruz’s proposal is not so much a flat-tax plan as it is a more ambitious restructuring of how the government raises revenue — and, in effect, of the U.S. economy. This makes it interesting — but the numbers still don’t add up. Though Mr. Cruz provides crucial details that others leave out, including which tax deductions he would eliminate and estimates of how much his plan would cost, those details lead to a familiar conclusion: Mr. Cruz’s plan would reduce federal revenue in order to give huge tax cuts to the wealthy at a time when the government has to retire the baby boomers — and do much more.” [Editorial- Washington Post, 10/30/15]
Cruz’s Tax Plan Was An Across The Board 10% Flat Tax
Individual Tax Rates
October 2015: Cruz Revealed His Plan For A 10% Flat Tax. According to the Washington Post, “Sen. Ted Cruz (R-Tex.) unveiled a flat tax plan minutes before Wednesday night’s GOP presidential primary debate that calls for capping income and investment taxes at 10 percent. Cruz announced his positions in The Wall Street Journal. The presidential hopeful proposes abolishing income and payroll taxes for the first $36,000 of income for a family of four, and a flat 10 percent tax on wages and investment income above that level.” [Washington Post,10/28/15]
Investment Tax Rates
Cruz’s Plan Included Investment Income In The 10% Tax. According to an op-ed by Ted Cruz, “With these goals in mind, based on a structure suggested by President Reagan’s tax adviser, Arthur Laffer, my Simple Flat Tax plan features the following: For a family of four, no taxes whatsoever (income or payroll) on the first $36,000 of income. Above that level, a 10% flat tax on all individual income from wages and investment. No death tax, alternative minimum taxor ObamaCare taxes. Elimination of the payroll tax and the corporate income tax, to be replaced by a 16% Business Flat Tax. This would tax companies’ gross receipts from sales of goods and services, less purchases from other businesses, including capital investment. Simple, efficient, fair. A Universal Savings Account, which would allow every American to save up to $25,000 annually on a tax-deferred basis for any purpose.” [Op-ed- Ted Cruz, 10/28/15]
Corporate Tax Rates
Cruz’s Tax Plan Would Replace Payroll And Corporate Income Taxes With A 16% Flat Business Tax. According to an op-ed by Ted Cruz, “With these goals in mind, based on a structure suggested by President Reagan’s tax adviser, Arthur Laffer, my Simple Flat Tax plan features the following: For a family of four, no taxes whatsoever (income or payroll) on the first $36,000 of income. Above that level, a 10% flat tax on all individual income from wages and investment. No death tax, alternative minimum tax or ObamaCare taxes. Elimination of the payroll tax and the corporate income tax, to be replaced by a 16% Business Flat Tax. This would tax companies’ gross receipts from sales of goods and services, less purchases from other businesses, including capital investment. Simple, efficient, fair. A Universal Savings Account, which would allow every American to save up to $25,000 annually on a tax-deferred basis for any purpose.” [Op-ed- Ted Cruz, 10/28/15]
Trump’s Tax Plan Favored The Rich And Investors Over The Middle Class
Trump’s Tax Plan Benefitted The Wealthy
New York Times: Trump Would Cut Taxes For The Wealthiest Americans To The Lowest Level Since 1931. According to the New York Times, “Currently, the top income tax rate for regular income is 39.6 percent. Mr. Trump would cut that rate to 25 percent, the lowest level since 1931.” [New York Times, 9/28/15]
Trump’s Tax Plan Cut The Corporate, Business Income, And Capital Gains Tax Rates.According to Politifact, Trump’s tax plan includes, “A corporate tax rate of 15 percent, an end to the deferment of overseas corporate income, and repatriating of foreign income at a 10 percent rate; A pass-through business income tax rate of 15 percent; A capital gains tax at 0, 15 and 20 percent; and a tax on carried interest as ordinary income.” [Politifact, 11/5/15]
Capital Gains Benefit The Richest Americans: Half Of All Capital Gain Go To The Wealthiest 0.1 Percent. According to the Washington Post, “While it’s true that many middle-class Americans own stocks or bonds, they tend to stash them in tax-sheltered retirement accounts, where the capital gains rate does not apply. By contrast, the richest Americans reap huge benefits. Over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.” [Washington Post, 9/11/11]
Low Tax Rates On Capital Gains “Exacerbated Economic Inequality.” According to the Center for American Progress, “Reducing tax rates for investment income has delivered enormous windfalls to the wealthiest Americans and exacerbated economic inequality. A study by Thomas L. Hungerford of the Economic Policy Institute finds that, ‘By far, the largest contributor to increasing income inequality (regardless of income inequality measure) was changes in income from capital gains and dividends.’ By taxing capital gains and dividends at a lower rate than other income, the federal government is making it more likely that the rate of return on capital will exceed the economic growth rate—the key driver of Piketty’s theory of rising future economic inequality.” [Center for American Progress,6/25/14]
Trump’s Tax Plan Eliminated The Estate Tax. According to Politifact, Trump’s tax plan includes “Eliminating the alternative minimum tax, the net investment income surtax, the estate tax and the Affordable Care Act taxes.” [Politifact, 11/5/15]
The Estate Tax Only Applied To Inheritances Over $10 Million (Like Trump’s Children). According to the New York Magazine, “While Trump would not eliminate taxes on investment income, as Marco Rubio proposes, he likewise plans to eliminate the estate tax, which currently applies only to inheritances over $10 million.” [New York Magazine,9/28/15]
The Estate Tax Limited Large Tax Breaks For Wealthy Households. According to the Center on Budget and Policy Priorities, “The federal estate tax is a tax on property (cash, real estate, stock, or other assets) transferred from deceased persons to their heirs. Only the wealthiest estates pay the tax because it is levied only on the portion of an estate’s value that exceeds a specified exemption level — $5.43 million per person (effectively $10.86 million per married couple) in 2015. The estate tax thus limits, to a modest degree, the large tax breaks that extremely wealthy households get on their wealth as it grows, which can otherwise go untaxed.” [Center on Budget and Policy Priorities,3/23/15]
MSNBC: “Donald Trump’s Tax Plan Is Great For Donald Trump.” According to MSNBC, “Donald Trump’s tax plan is great for Donald Trump.” [MSNBC, 9/28/15]
Trump’s Tax Plan Would Have Increased The Deficit
Politifact: Trump’s Tax Plan Would Increase The Deficit Due To Revenue Loss. According to Politifact, “Trump said his tax plan would not increase the deficit. Free market-oriented and liberal groups alike say Trump’s tax plan would lead to a $10 trillion revenue loss, even if it did create economic growth. Since Trump has said he will not slash retirement programs like Social Security and Medicare, experts doubt that any spending cuts he made would result in a revenue-neutral tax plan. We rate Trump’s claim False.” [Politifact, 11/5/15]
Trump’s Plan Would Lead To A $10 Trillion Revenue Loss In A Decade. According to Politifact, “Both right- and left-leaning groups found that Trump’s plan could lead to at least a $10 trillion revenue loss in a decade, without factoring in interest.” [Politifact,11/5/15]
Atlantic: Trump’s Tax Plan Was A “Big Tax Cut For The Wealthy” That Would Add Trillions To The Deficit. According to the Atlantic, “Yet superlatives aside, in most other respects the Trump proposal falls well within the Republican mainstream: It’s a big tax cut for the wealthy that, despite claims to the contrary, will add trillions to the deficit. ‘The best way to think about this plan is, start with Governor Jeb Bush’s tax plan and then make it a larger tax cut,’ said Kyle Pomerleau, an economist at the Tax Foundation.” [Atlantic, 9/28/15]
Trump’s Tax Cuts For Lower-Income Americans Were “minimal”
Tax Foundation: The Tax Cuts For The Lowest-Earning Americans Were “Small Or Minimal.” According to MSNBC, “‘The much lower top marginal rate of 25 percent will mean a large cut for the top, even with the limitation on itemized deductions,’ Kyle E. Pomerleau, an economist as the conservative Tax Foundation, which is scoring all the GOP plans, told msnbc in an email. ‘It will also be a cut for those on the bottom, but the cut will be small or minimal. Trump is claiming a tax increase on wealthy individuals, but I do not believe this will be the case.’” [MSNBC, 9/28/15]
Trump’s Plan Eliminated Taxes That Helped Pay For Insurance Subsidies For Low- And Middle-Income Americans. According to MSNBC, “In addition, Trump would eliminate a 3.8% surcharge on capital gains taxes for wealthy investors created to finance the Affordable Care Act, which provides subsidies to lower and middle income Americans to buy insurance.” [MSNBC, 9/28/15]
Tax Foundation: By Reducing Rates For Everyone, Trump’s Tax Plan Would Do Nothing To Address Income Inequality. “Analyses of Bush’s plan have also found that the majority of its lost revenue would be to finance major taxreductions for the ultra-rich. Citizens for Tax Justice, which favors a higher tax burden on the wealthy, estimated that 53% of the cost would go to the richest 1% of taxpayers versus 3% of the cost that would go to the bottom 20%. The TaxFoundation also found that the top 1% would score an average 11.6% increase in net income while the bottom 80% of taxpayers would get smaller bumps between 1% and 3%. Trump’s plan cuts rates at the top even more than Bush, making it likely that the distribution ends up raising similar inequality concerns.” [MSNBC, 9/28/15]
Trump’s Tax Plan Reduced The Number Of Income Brackets And Lowered Rates
Trump’s Tax Plan Included Four Income Brackets At Tax Rates Of 0, 10, 20, And 25 Percent With Fewer Deductions. According to Politifact, “It [Trump’s tax plan] includes: Four income tax brackets with rates of 0, 10, 20 and 25 percent, with no deductions except for the charitable and mortgage interest deductions.” [Politifact, 11/5/15]
Under The Plan, Individuals Making Less Than $25,000 And Couples Making Less Than $50,000 Would Not Pay Any Taxes. According to Politico, “Under the proposal, individuals making less than $25,000 and married couples making less than $50,000 will not have to pay taxes. While 36 percent of American households do not pay income tax currently, that share would jump to 50 percent. The current highest income-tax rate—39.6 percent—would drop to 25 percent.” [Politico, 9/28/15]
Carson’s “Tithing” Flat Tax Would Create Massive Cuts
Carson Suggested A Non-Specific 10-15% Tithing Flat Tax Plan
Carson’s Tax Plan Was Based On Tithing. According to Fox Business, “In an interview with FOX Business Network’s Stuart Varney, Dr. Ben Carson laid out his tax plan that is based on tithing. ‘It’s a model that I’m looking at. The proportionality model — what could be fairer than that,’ he said. ” [Fox Business, 8/12/15]
Carson Used His Seventh-Day Adventist Faith To Advocate His For His Tax Plan, Said “I Think God Is A Pretty Fair Guy.” According to Politifact, “Carson, a Seventh-day Adventist, has advocated for the federal government to adopt a tithing system across the board, referring to the Judeo-Christian practice of giving one-tenth of one’s income to the Church. ‘I think God is a pretty fair guy,’ he reasoned in the first Republican debate.” [Politifact, 11/4/15]
Carson Proposed A Flat, 10% Tax Rate And Pledged To “Get Rid of All The Deductions And Loopholes.” According to Fox Business, “‘You make $10 billion, you pay a billion. You make $10, you pay one [dollar]. [Of] course I would get rid of all the deductions and all of the loopholes but here’s the key, people, they look at a guy who put in a billion dollars, he’s got $9 billion left, that’s not fair — we need to take more of his money. That’s called socialism. And what made America … a great nation was we had a very different attitude. We would say he just put in a billion dollars, let’s create an environment that’s even better for him so that next year he can make $20 billion and put in $2 billion. That’s how we went from nowhere to the pinnacle of the world in record time. And it’s growth, it’s not taking what’s there and dividing it up and making it smaller,’ he said.” [Fox Business, 8/12/15]
When Challenged On The Fact That A 10% Flat Tax Would Bring In Less Revenue Than The Government Needed To Operate, Carson Admitted The Tax Would be Closer To 15%. According to Politifact, “Moderator Becky Qu