GOP Tax Lies: A Week In Review
September 22, 2017
CLAIM: Republican tax writer Kevin Brady claimed Republicans could make their tax cut plan revenue neutral through economic growth and by eliminating loopholes and special interest tax breaks.
BRADY: “The best way to do that is to balance within the budget and there’s two ways you do it. One, we will get economic growth from bold transformational tax reform. That’s good. But we also have to get the special interest provisions, loopholes, exclusions, so that we can lower the rates for everybody. That's the work that we continue to do.” [Sunday Morning Futures, Fox News, 9/17/17]
FACT: Even if all tax breaks were eliminated, Republicans would have to increase the deficit to fulfill their proposed corporate tax cut.
Associated Press: “There is also concern that a corporate tax cut would swell the federal budget deficit. When the nonpartisan Tax Policy Center published an analysis this week, it found that even if virtually all tax breaks were eliminated, the corporate rate could drop only to 26 percent without increasing the deficit.”
FACT: Economic growth could not pay for the Republicans’ tax giveaway.
Wall Street Journal: “Faster growth likely couldn’t cover all of a $1.5 trillion tax cut, which would reduce projected federal revenue by more than 3%. The high end of the nonpartisan Joint Committee on Taxation’s estimate of revenues from economic growth in a 2014 tax plan was $700 billion.”
Tax Policy Center: “In an updated analysis, the Tax Policy Center estimates that the House Republican leadership’s 2016 tax blueprint would reduce economic output by 0.5 percent by 2026 and add about $3.7 trillion to the nation’s debt over the coming decade. By 2036, the plan would shrink output by between 1 percent and 2.6 percent and add between $4.3 trillion and $5.5 trillion to the debt.”
Washington Post: “To sway lawmakers who are squeamish about adding that much money to the federal debt, the White House and Republican leaders are expected to use rosy economic-growth projections that have never before been used by the Congressional Budget Office or the Joint Committee on Taxation, two bodies long seen as Congress’s independent scorekeepers.”
New York Times: “But a range of economists, both conservative and liberal, are highly skeptical that a tax cut is the cure for what ails the economy. They say Mr. Trump has little opportunity to increase economic growth in the next few years because the economy is already growing about as fast as it can.”
CLAIM: Gary Cohn claimed middle-class families would have more disposable income from Trump’s tax cut.
COHN: “We are committed to give them relief, relief where they will see when they get their first paycheck in January of 2018 that they will have more disposable income in their hand.”
FACT: Trump’s tax plan could make middle-class Americans pay more.
CNN Money: “About 20% of taxpayers could pay higher taxes under the Trump administration’s tax reform plans, according to an analysis released Wednesday by the Tax Policy Center… Specifically, a large number of middle class and upper-middle class tax payers would see a tax hike due to the loss of deductions and the elimination of both personal and dependent exemptions.”
FACT: Trump’s tax cuts could leave most Americans worse off through offsetting program cuts to critical programs like Social Security and Medicare.
Vox: “We don’t know a lot of details about President Trump’s tax plan, but we do know it’s expensive, in terms of lost revenue for the federal government. Paying for it could very well mean cutting programs that Americans rely on, leaving most of the country worse off than before the tax cuts.”
CLAIM: Senate Republicans were considering a budget that would allow $1.5 trillion for tax cuts over the next decade.
Wall Street Journal: “Senate Republicans are considering writing a budget that would allow for up to $1.5 trillion in tax cuts over the next decade, said people familiar with the discussions. Budget talks are continuing and no final decision has been reached yet.”
FACT: The tax cuts Republicans want for wealthy corporations and individuals would cost far more than $2 trillion.
Wall Street Journal: “The tax-rate cuts Republicans want for corporations, other businesses, estates and individuals would likely increase budget deficits by far more than $2 trillion, so in their tax bill they would still need to find savings elsewhere in the tax code, likely by getting rid of some tax breaks.”
Washington Post: “The president has previously proposed cutting the corporate tax rate from 35 percent to 15 percent — a move budget experts project would cost the country $2.4 trillion over a decade.”
Committee for a Responsible Federal Budget: “The arguments being made to allow for $1.5 trillion of tax cuts – dynamic scoring and current policy adjustments – are disingenuous and at best can help explain a fraction of this massive tax cut.”
CLAIM: The White House tried to sell its corporate tax giveaway by claiming the current tax burden hurts American competitiveness.
SHORT: “Our corporate tax rate is just way outdated. At this point, it is no longer competitive with other developed countries. American companies are fleeing our shores to countries where they don't have the same tax rate.” [America’s Newsroom, Fox News, 9/21/17]
FACT: The United States is below average among developed countries in corporate tax burden.
CNN Money: “Corporate tax revenue only accounts for about 2.2% of U.S. GDP, which is below the OECD average. And as percent of total taxes collected, the U.S. has been roughly on par with the OECD average in recent years.”
Washington Center for Equitable Growth: “Those arguing for corporate tax cuts typically cloak their arguments under the guise of competitiveness. But this is nonsense. Our multinational companies are the most competitive on the planet. The United States has a disproportionate share of the Forbes 2000 list of global companies, and after-tax profits are at record levels. Further, our multinational companies are so skillful at exploiting loopholes to lower their tax bills that they often achieve effective tax rates in the single digits.”
Washington Post: “But there are a lot of reasons to be highly skeptical of Trump's repatriation plan… These actions would make rich executives and shareholders wealthier by boosting the company stock price. They would not deliver a boon to workers — or the economy as a whole — as Trump is promising.”