The top House GOP taxwriter accused a think tank of making unfounded and misleading assumptions in its unflattering take on the Republican tax reform framework’s revenue and distributional effects, which congressional Democrats seized on to attack Republican supporters of the framework.
The office of House Ways and Means Committee Chair Kevin Brady, R-Texas, excoriated the Urban-Brookings Tax Policy Center’s (TPC) analysis of the framework, calling it “misleading, unfounded, and biased” in a statement.
TPC’s report, which was issued September 29, concluded that many aspects of the Republican tax reform negotiators’ unified framework “were unspecified or left to be determined by the tax writing committees in Congress,” according to the Urban-Brookings Tax Policy Center (TPC) analysis released September 29. Still, the think tank offered a tentative analysis of the framework, using last year’s House GOP “Better Way” tax reform blueprint to fill in some of the gaps.
The TPC estimated that the framework would reduce federal revenue by $2.4 trillion over a decade. The TPC attributed a $2.6 trillion loss to tax changes on the business side, including passthrough-related provisions; a $240 billion loss from eliminating the estate and gift taxes; and roughly $470 billion of additional revenue from altering individual income tax provisions.
Distributionally, the TPC posited that under the framework, most households would receive a tax cut in the first decade, but with a disproportionate benefit flowing to wealthy households. Also, less generous indexing for inflation and swapping of indexed personal exemptions for an expanded yet unindexed child tax credit would erode households’ tax savings over time, said the TPC, adding that this would increase upper-middle-income earners’ taxes within a decade.
Brady’s office was not persuaded, contending that TPC made unfounded assumptions about the income thresholds of the framework’s marginal tax brackets, as well as which tax benefits would be eliminated “where decisions have yet to be made by the committees of jurisdiction.”
While Brady’s camp said the TPC ignored the framework’s “stated goal of maintaining progressivity in the tax code,” the framework document only mentions progressivity in the context of an optional fourth top individual income tax rate. However, the TPC also drew fire for not including a fourth, top rate to capture high-income households.
The ranking minority members of the Senate Finance and House Ways and Means committees, Ron Wyden, D-Ore., and Richard E. Neal, D-Mass., touted the analysis as evidence of Republicans’ fecklessness in pursuit of tax reform.
“Despite Republican claims that their tax plan would benefit the middle class, today’s analysis from the Tax Policy Center confirms that the [Republican leaders’ unified tax reform framework] would overwhelmingly favor the rich at the expense of the middle class and hardworking Americans,” Neal said in a statement. “This tax plan is a gut punch to the middle class and a golden goose for the rich.”
Wyden’s statement was harsher: “This report on [President Trump’s] tax scam is more hard evidence that the president and his out-of-touch millionaire advisors are executing a middle-class con job. . . . Nothing can hide the truth that the only individuals benefiting from this plan are the president, his family and his high-flier friends.”
Jonathan Curry contributed to this article.
Follow Luca Gattoni-Celli (@TheGattoniCelli) on Twitter for real-time updates.