Economy

House Republican Bill Would Fast-Track Tax Cuts For The Wealthy And Corporations

House Republicans next week intend to vote on a plan that would both extend all of the Bush tax cuts — including those on income in excess of $250,000 — and fast-track “tax reform.” If the House GOP bill were adopted, tax reform legislation would “have special protections in the U.S. Senate, limiting the opportunities for lawmakers to use blocking tactics.”

But the GOP bill only calls for a certain kind of tax reform — specifically that which would benefit the rich and corporations. Under the GOP’s fast-track approach, a tax reform bill would have to consist of:

(1) a consolidation of the current 6 individual income tax brackets into not more than two brackets of 10 and not more than 25 percent;

(2) a reduction in the corporate tax rate to not greater than 25 percent;

(3) a repeal of the Alternative Minimum Tax;

(4) a broadening of the tax base to maintain revenue between 18 and 19 percent of the economy; and

(5) a change from a ‘‘worldwide’’ to a ‘‘territorial’’ system of taxation.

As Citizens for Tax Justice noted, these changes would massively benefit the wealthy and corporations, shifting the tax burden down the income scale. In fact, consolidation of the tax code in the way the GOP envisions would give millionaires a $187,000 annual tax cut, while likely increasing taxes on the middle-class and working families, due to the elimination of deductions upon which they depend.

Changing to a “territorial” system of corporate taxation, meanwhile, would boost the incentive to invest overseas and push jobs offshore. These are the sort of changes which Republicans want to protect from procedural shenanigans, even as they drive the use of the filibuster to unprecedented heights, including on legislation that could boost the sluggish economic recovery.

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