Revealed: Republican tax gifts to the rich would explode deficit they always complain about

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14 May

Scathing analysis shows House GOP budget would add 'trillions' to deficit while gutting safety net

While Republicans on Capitol Hill—including the leaders of both chambers of Congress—have long argued for reducing the national debt, the GOP is now pushing a tax bill that would not only fund giveaways to the rich by gutting programs that serve the working class, but also add $3.8 trillion to the U.S. deficit.

The national debt is currently $36.2 trillion. The Joint Committee on Taxation (JCT) on Tuesday released an analysis showing that the Republican bill would cost $3.8 trillion through 2034, or 1.1% of gross domestic product.

The JCT document notes that some estimates—such as the impact of modifications to de minimis entry privilege for commercial shipments and to Medicare, including limiting coverage—will be provided by the Congressional Budget Office.

The JCT's release coincides with a key meeting in the U.S. House of Representatives. As Politicodetailed:

The newly revised estimate released Tuesday afternoon is up slightly from the $3.7 trillion price tag budget forecasters had previously put on the plan, and it comes as the tax-writing Ways and Means Committee began formally debating the package. Additional changes are possible there, and also later, when Republicans are preparing to take the legislation to the House floor." [...]
Under the House GOP's budget, the size of their tax cuts is contingent on lawmakers simultaneously cutting spending, and Republicans are hoping to match $4 trillion in tax cuts with $1.5 trillion in spending reductions.

Ahead of the markup, Amy Hanauer, executive director of the Institute on Taxation and Economic Policy (ITEP), said in a statement that "this bill gives enormous additional tax cuts to wealthy people and corporations, spikes the deficit, and strips healthcare from millions of Americans."

"Reckless tax cuts for the top and new corporate loopholes appear to be the big features of this bill, and they're paid for by cutting our healthcare and making American communities more vulnerable to floods, fires, and storms," she stressed. "The revenue raisers—which don't stop this from being extremely expensive—seem to be about picking winners and losers, rather than passing rational, consistent policies."

ITEP's statement also lists the bill's major provisions, including making changes to personal income tax rates and brackets from the GOP's 2017 Tax Cuts and Jobs Act permanent; making permanent and increasing the "pass-through" business deduction; increasing the estate tax exemption; and temporarily increasing the child tax credit, but excluding millions of children.

Americans for Tax Fairness (ATF) similarly listed provisions on social media Tuesday—and highlighted their impacts.

What's the result of maintaining the top income tax rate cut? "25% of the benefits go straight to the top 1%," the group noted. "The average top 1% household makes $2.5 million a year. They would get a $55k tax break. The top 400 taxpayers would get an $800 MILLION tax cut each year."

"Since they're deficit-financing most of this, every penny of the 'savings' DOGE has found... is paying for tax breaks for the wealthy."

What about widening the "pass-through" loophole? "Half of this break goes to millionaires," ATF continued. "The top 0.1% would get a $107,000 tax cut. The top 1% would get an average $22,500 tax cut. Working families would get around $40 to $50. White households get 90% of the benefit."

The group pointed out that "the package doubles how much rich heirs can inherit without paying taxes. That means a couple could pass on $30 MILLION without paying a penny in taxes. This tax break ONLY benefits the richest 0.2% of households. Weakening the estate tax is projected to cost $200 BILLION."

"It also gives corporations $642 BILLION in tax breaks," ATF said. "Most of the benefit of corporate tax cuts goes to CEOs, rich shareholders, and foreign investors. One provision gives Apple, Amazon, Google, Meta, and Tesla alone a $75 BILLION tax cut. Another encourages offshoring."

ATF also tied the proposal to supposed cost-cutting efforts by President Donald Trump's Department of Government Efficiency (DOGE) and its de facto leader, Elon Musk—who also happens to be the CEO of Tesla and the richest man on Earth.

"The part they won't say out loud?" the group wrote. "Since they're deficit-financing most of this, every penny of the 'savings' DOGE has found by cutting the [the Department of Veterans Affairs], Department of Education, and Social Security Administration is paying for tax breaks for the wealthy. Really."

Although Republicans control both chambers and the White House, their majorities are slim, meaning absences and disagreements over issues like increasing the deficit or cuts that will anger constituents in swing districts could slow or even impede their ability to send "one big, beautiful bill" to Trump's desk.

As Common Dreams reported earlier Tuesday, U.S. Sen. Bernie Sanders (I-Vt.) is deploying organizers to mobilize opposition against the GOP's emerging reconciliation package, focusing on districts he has visited as part of his Fighting Oligarchy Tour.

Materials that organizers plan to distribute encourage constituents to call their representatives and request they vote no "on a bill to cut Medicaid, nutrition assistance, and education to pay for hundreds of billions of dollars in more tax breaks for billionaires."

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