SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
institute on taxation and economic policy
Nonpartisan Analysis Confirms: GOP Tax Cuts Would Come Nowhere Close to Paying for Themselves
Economic activity spurred by the tax breaks—which are largely an extension of soon-to-expire provisions of the 2017 Trump-GOP tax cuts—would increase federal revenues by roughly $103 billion between 2025 and 2034, according to JCT.
That would barely put a dent in the overall projected cost of the tax cuts, bringing it down to $3.7 trillion from $3.8 trillion.
"I'm sorry, it is so funny that JCT says the GOP tax provisions pay for only 2.7% of themselves," Bobby Kogan, senior director of federal budget policy at the Center for American Progress, wrote in response to the analysis. "Republicans are out here pretending their tax bill will be the single greatest boost to the economy ever, and JCT says they only get a minuscule boost."
A separate analysis published Thursday by the Institute on Taxation and Economic Policy (ITEP) shows that the benefits of the Republican bill's tax provisions would flow disproportionately to the wealthiest Americans.
"The $121 billion in net tax cuts going to the richest 1% next year would exceed the amount going to the entire bottom 60% of taxpayers (about $90 billion)," said ITEP, whose analysis did not factor in the impact of the legislation's unparalleled cuts to Medicaid and federal nutrition assistance, which would deliver a major blow to the household resources of lower-income Americans.
Amy Hanauer, ITEP's executive director, said Thursday that "it's not surprising that this bill was written behind closed doors and rushed through in the night before Americans had a chance to see what it contains."
"This bill extends enormous tax cuts to those who have the most," said Hanauer. "It will increase inequality, reduce health coverage, and take food from people's tables, all to shower the wealthiest people in this country and foreign investors with tax breaks. In the end, this reconciliation bill redistributes resources up the income scale, widening the already-huge chasm between the rich and the rest of us."
GOP Bill Gives Rich Funders of Deeply Unpopular School Privatization 'A Lucrative Tax Shelter'
In effect, according to an analysis published Thursday by the Institute on Taxation and Economic Policy (ITEP), the legislation "allows wealthy individuals to avoid paying capital gains tax as a reward for funneling public funds into private schools."
"While the bill significantly cuts charitable giving incentives overall, nonprofits that commit to focusing solely on supporting private K-12 schools would be spared from those cuts and see their donors' tax incentive almost triple relative to what they receive today," ITEP explained. "On top of that, the bill goes out of its way to provide school voucher donors who contribute corporate stock with an extra layer of tax subsidy that works as a lucrative tax shelter."
"The House tax plan would create a system that treats people supporting private K-12 vouchers far more generously than donors to children's hospitals, veterans' groups, and every other cause imaginable," the group added.
ITEP estimated that if the policy had been in effect in 2021, billionaire Elon Musk could have saved $690 million in federal capital gains taxes.
"By putting this arrangement on the books," ITEP said, "the bill's proponents have ensured that there will be an eager pool of wealthy donors lined up to help move public funds into private schools, and to collect their capital gains tax cuts as a reward."
Josh Cowen, a professor of education policy at Michigan State University, said Republicans' effort to ram the tax scheme through as part of their filibuster-proof reconciliation package is a testament to the unpopularity of school privatization at the state and local levels.
"People don't like this stuff," Cowen told Roll Call. "Voters, whether they're Republican or Democrat, look at this stuff, and they're like, what does this really do for me?"
Supporters of school privatization were quick to celebrate the inclusion of tax breaks for voucher donors, with the American Federation for Children applauding Republican leaders for their "relentless commitment to ensuring school choice becomes the law of the land."
The American Federation for Children is funded by the family of billionaire Betsy DeVos, who served as education secretary during President Donald Trump's first term.
The DeVos family is part of a network of deep-pocketed school privatization proponents that has been working for years to siphon taxpayer funding away from public schools and toward private—often religious—institutions.
Randi Weingarten, president of the American Federation of Teachers, toldThe New York Times on Tuesday that voucher supporters "don't believe in public schooling."
"We are against giving people tax breaks to defund public schools," the union leader said. "What you're seeing here is the fragmentation of American education."
The National Education Association, the largest teachers' union in the U.S., has also voiced opposition to the voucher tax break scheme, writing in a letter to members of the House Ways and Means Committee earlier this week that "taxpayer dollars should go to public schools open to all students, not private schools that can pick and choose their students."
"Every time voucher schemes are on state ballots—17 times in total, including three states last November—voters have rejected them," reads the letter. "America cannot afford to fund two education systems, one private and one public."
Most Popular