GOP tax plan to slash corporate tax rate, eliminate family tax credit
On Thursday, House GOP tax writers completed the final draft of their proposed tax cuts outlining a $1.51 trillion plan to reduce taxes for corporations. The cuts would reduce the corporate tax rate from 35 percent to 20 percent, while the family tax credit would be phased out after five years.
The reduction of the corporate tax rate a major goal of President Trump and big business, even though the total amount of taxes collected from corporations over the last fifty years has continued to fall. In 1952, corporate taxes accounted for 33 percent of all federal tax revenue. Today, despite record-breaking profits, corporate taxes now total less than 9 percent.
Meanwhile, the family tax credit, which mostly benefits working families via a $300 credit for each child and non-child dependent, would be eliminated over the next five years.
GOP leadership has stated that their bill would actually benefit middle class families by spurring economic growth. Speaker Paul Ryan (R-Wis.) had the following to say about the party’s position.
“Under our plan, typical middle-class families will see bigger paychecks and receive a $1,182 tax cut. That means more take-home pay and more money in your pocket. Working with the Senate and President Trump, we are going to make good on our promise to deliver relief to the American people. It’s time to get this done.”
The bill, in it’s current form, would also eliminate many itemized deductions, including those for student loan interest and medical expenses.
“Contrary to their assertions, the Republicans are picking winners and losers,” Jerry Howard, chief executive of the National Association of Homebuilders, said in an interview. “They are picking rich Americans and corporations over small businesses and the middle class.”
Lawmakers must keep the cost of the bill to $1.5 trillion to ensure fiscal conservatives in the GOP will vote with the rest of the party, and avoid a filibuster by Democrats.