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CBO: Senate Tax Plan Would Grow Debt, Benefit Wealthy More Than Poor

by Countable | 11.28.17

What’s the story?

In their latest analysis, the nonpartisan Congressional Budget Office estimates that the Senate GOP tax plan would benefit higher-earning taxpayers more than lower-income households.

The CBO report, released on Sunday, also concludes that the White House-backed Tax Cuts and Jobs Act would increase the deficit by $1.4 trillion over the next 10 years.

The current bill would remove the Obamacare individual mandate, which requires that taxpayers purchase healthcare or pay a penalty. If enacted, the CBO estimates "(t)he number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027."

The latest Senate proposal would permanently cut the corporate tax rate from 35 percent to 20 percent, temporarily reduce individual income taxes, and modify – or eliminate - a number of deductions.

Senate Republicans are still waiting on a "dynamic" score from the Joint Committee of Taxation, which will show the effects of the proposed tax cuts on the economy-at-large. This could help support a key claim of the Trump administration and congressional Republicans: that their plan will help pay for itself by stimulating economic growth.

Why does it matter?

The CBO score does little to assuage the concerns of Republican Sens. Ron Johnson of Wisconsin, Bob Corker of Tennessee, Susan Collins of Maine, Jeff Flake of Arizona, and James Lankford of Oklahoma, who have all criticized the current tax plan.

"In the current form, I wouldn't vote for it," Johnson said in a recent interview on CNBC's Squawk Box. "I want to get this thing fixed, and vote for pro-growth tax reform that makes all American businesses competitive globally."

Corker said he wouldn’t support any tax legislation that adds to the deficit in the long-run, and Collins has expressed reservations about including healthcare in a tax bill.

While the CBO does estimate that the number of people without insurance would increase by 13 million in 2027, it also notes that "nongroup insurance markets would continue to be stable in almost all areas of the country" over the next 10 years.

However, "average premiums in the nongroup market would increase by about 10% in most years of the decade … relative to the CBO's baseline projected. In other words, premiums in both 2019 and 2027 would be about 10% higher than is projected in the baseline."

The CBO report also concludes that the majority of tax breaks would go to the wealthiest Americans. In 2025, for example, the CBO estimates that people earning under $10,000 would lose $8.7 billion as a group while people earning $1 million or more would gain $15.8 billion as a group.

Senate Finance Committee spokeswoman Julia Lawless criticized the CBO report, saying in a statement:

"Unfortunately, this is not the first time CBO has vastly overestimated the impact of the deeply flawed individual mandate. And, for members concerned about the sunset date for individual tax cuts, Democrats will have a chance to make these strong middle-class tax cuts permanent on the floor."

What do you think?

Does the CBO score change your thoughts on the Tax Cuts and Jobs Act? Should the Senate proceed with the current version of the tax bill? Does it need further amendment on the Senate floor? Should it be stopped altogether? Hit the Take Action button to tell your senators, then share your thoughts below.

—Josh Herman

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(Photo Credit: kaarsten / iStockphoto)

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(208)
  • Joan
    11/28/2017
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    Vote no on the tax scam!!! We all see through the agenda. Suppress the poor and middle class. Elevate the richest of the rich. Please, God. Put an end to this!!

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  • Karla
    11/28/2017
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    This tax cut is a total farce! You can claim all you want that it’s going to pay for itself with growth but that is very wishful thinking. Besides we all know trickle-down doesn’t work. Plus you’re taxing those making under $10,000 more. What kind of monster takes from the poor to give to the rich. Shameful! Karla E. Manning 1-937-524-1747

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  • Roxanne
    11/29/2017
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    Oppose this regressive tax plan. It’s unacceptable that people earning less than $10,000 per year will have the most severe tax increase and people earning $1,000,000 or more will benefit the most by tax cuts. This isn’t “draining the swamp,” it’s throwing the most vulnerable to the ‘gators!

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  • David
    11/28/2017
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    Of coarse the new tax plan would benefit the haves more than the have nots. The top 20% of tax payers pay 95% of the federal income tax. You cannot give a tax refund to someone who has not paid in any taxes.

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  • Tammy
    11/29/2017
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    Senators - please work hard to ensure this fiscally irresponsible and incredibly harmful scam bill is defeated. Allowing no hearings and working in unrelated partisan language is also unacceptable.

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  • Aimee
    11/29/2017
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    Once again the GOP is trying to push thru a bill that is horrible for most Americans in the dead of night. And once again our so called leaders such as Congressman Upton are not listening to their constituents and don’t seem to care about their desires or needs. We are tired of the GOP attack on the middle class and more rewards for the wealthy. I guess the only way we can respond is to vote you out of office because you are NOT working for our needs.

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  • John
    11/29/2017
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    The Senate tax bill will not benefit the majority of Americans and will grow the deficit. This bill goes against fiscal conservatism in the name of getting a win for the party. In the end, hard-working Americans will pay if it passes. Do us a favor, work together with Democrats to produce common sense legislation that will benefit all Americans.

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  • Jill
    11/29/2017
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    Thus tax bill is a farce designed by the powerful and wealthy to put more money in their pockets, Wall Street financiers, wealthy donors while blowing an even larger whole in the deficit. The GOP are hypocrites. For the past decade they have raised against the deficit and now they are willing to add 1.4 Trilion. This tax bill will not benefit Mainstreet or middle class Americans! It will be paid for as usual on the backs of everyday hard working Americans! VOTE NO IF YOU HAVE A HEART OR ANY CONCERN FOR AMERICANS!!!!

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  • Jim
    11/29/2017
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    This is a huge giveaway to the wealthy donors of the Republican Party . There will be hell to pay in 2018 when the people realize the con job being pulled on them. So long GOP.

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  • Rebecca
    11/29/2017
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    The GOP tax bill is a scam designed to benefit the wealthy, and the CBO score proves it. I am writing to beg my elected representatives to kill this awful bill! If you vote for it, you demonstrate what most Americans already believe: that you are out there working for your biggest donors, not the working people who send you to Washington.

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  • NoHedges
    11/28/2017
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    Ok, so we know Trump is going to screw as many middle class Americans as humanly possible. Can we move on to how to stop him, please? 💎 Yesterday is gone. Tomorrow has not yet come. We have only today. Let us begin. -Mother Teresa

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  • Letesa
    11/29/2017
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    Vote no on the tax bill. Large corporations already have enough tax breaks. This is trickle down economics...we’ve been there. It doesn’t work. Stop it now.

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  • Chelsea
    11/29/2017
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    Please vote NO! This benefits a handful of people and corporations- not the average Mainer/American!

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  • M
    11/29/2017
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    If you don’t believe the proposed tax bill would be detrimental to the majority of the American people then all you have to do to change your mind is READ THE BILL. Then contact your representatives and tell them they’re gonna lose their job if they vote against the American people. They must vote NO on this bill. List of consequences are pages long, here is only one that’s not often referenced: GOP tax bill could spur $25 billion in Medicare cuts: CBO. The GOP tax bill could trigger automatic cuts worth $136 billion from mandatory spending in 2018, including $25 billion in Medicare cuts, if Congress doesn't find another way to offset its deficit increases, according to the Congressional Budget Office (CBO).Nov 14, 2017

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  • Terry
    11/28/2017
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    The nonpartisan CBO ? Don’t make me laugh. They are about as left of center as you can get.

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  • M
    11/28/2017
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    Same old song. The rich get the tax gold mine and the poor & middle class and their descendants get the shaft. When we pay our taxes we are going to carry that memory with us into the voting booth in 2018 and 2020!

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  • Terry
    11/29/2017
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    Tired of the politics. How about just lower corporate tax to 20% and cut spending to balance the budget. The $21 Trillion DEBT is the biggest drag on America.

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  • Krista
    11/29/2017
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    Vote NO on Trump tax scam!! I’m a registered Republican

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  • Kathy
    11/29/2017
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    David, that’s because the top 1% has 38% of the wealth.

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  • Mike
    11/29/2017
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    Vote no on a bill that is proven to benefit only rich and super rich. Why is the middleclass always screwed? I hope this disaster is turned around next year after the midterms. It’s never a good idea for any party in power in all branches of government.

    Like (3)
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