Myth vs. Fact on the GOP Tax Plan: Capitol Solutions
Congress has been working over the past several months to provide deserved tax relief to hardworking Iowa taxpayers. As we near the finish line, there are groups fighting hard to protect the decades old and status quo tax code which is broken for most everyday Iowans. In their battle to protect the establishment which has left so many individuals and families financially struggling, these groups are spreading falsehoods in an all-out effort to stop progress on common sense tax relief. I thought it was important to dispel some of these myths and present the facts.
Myth: This is only a tax cut for the wealthiest Americans.
Fact: The U.S. House of Representatives’ GOP tax plan maintains the top tax rate of 39.6 percent and lowers all other tax brackets, especially for those containing middle and low income taxpayers to provide tax relief to those who need it most. An analysis by the House’s Ways and Means Committee found a family of four making the median income in Iowa’s Third District would receive, on average, a $2,370 tax cut.
Myth: This bill actually raises taxes on the middle class and the poor.
Fact: The House’s GOP tax plan provides relief by lowering taxes on the middle income and those struggling to climb the economic ladder. Recently, even The New York Times released a study revealing “Nearly everyone who takes the standard deduction gets a tax cut in 2018.” And, “Families with children generally get a bigger tax cut.” By doubling the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples, more of your paycheck will be tax free.
Myth: Repealing the individual mandate is repealing Affordable Care Act (ACA).
Fact: Although the House’s GOP tax plan does not repeal the individual mandate, the Senate’s GOP tax plan does repeal the mandate, but still preserves the exchanges and all health plans folks have. This does not prevent anyone from purchasing health insurance from the ACA’s exchanges. The individual mandate is a tax penalty intended to mandate and force people to purchase health insurance, even if they don’t want it. Eighty percent (80%) of those who did not buy insurance who paid the penalty made less than $50,000. And Politico reported repealing the individual mandate would not have a substantial impact on the ACA’s markets.
Myth: The House’s GOP tax plan cuts Social Security, Medicare, and Medicaid.
Fact: The tax plan does not cut a single penny from Social Security, Medicare, or Medicaid. Again, there are no cuts to these critical programs in the plan.
Myth: Repealing the estate tax is a massive giveaway to the wealthiest Americans.
Fact: The estate tax (sometimes called the death tax) negatively impacts farms and businesses all over the Third District. These folks have worked hard to build their farm and business from the ground up, paying taxes the whole way through. Death should not be a taxable event and families should not have to fear the Internal Revenue Service and more taxes making it more difficult and costly to pass on the farm or family business to the next generation.
Myth: The House’s GOP tax bill will raise taxes on Americans’ retirement.
Fact: The tax bill retains 401(k) and IRAs exactly as they are in current law.
Myth: Lowering the tax rate on businesses will not help the economy.
Fact: The nonpartisan Tax Foundation analysis found the House’s GOP tax plan creates nearly one million new jobs and increases wages, on average, by $2,200. For too long wages have been stagnant and hardworking Iowans have been squeezed. The Iowa Policy Project found, when adjusted for inflation, Iowans working 40 hours per week at the median wage only got a raise of $270 from 1979-2016. It’s clear something is wrong and a broken tax code is suffocating the economy and keeping it from being healthy.
Myth: The House’s GOP tax plan will add $1.4 trillion to the national debt.
Fact: Groups are making inaccurate assumptions about the effect of the bill through something called “static scoring.” That means they are assuming when folks get a tax cut they all will simply hide their money under their mattress, when, in fact, that isn’t what folks do. When folks get a tax cut, many spend it, invest it, and some may save it for a time only to spend it later. This has a positive impact by growing and strengthening the economy and increasing tax revenue.
These are only a few of the many myths being spread about the tax relief plans being considered by Congress. Hardworking Iowans deserve not just tax relief and to keep and control more of their hard earned money, but they also deserve to know the truth.
CAPITOL SOLUTIONS is a weekly report to the people of Iowa from Third District Congressman David Young. The report is a resource of information for Iowans on the issues being debated and discussed in Congress, Iowa and the nation.
David Young is the Congressman serving all the people of the sixteen counties of Iowa’s Third Congressional District. He is a member of the Committee on Appropriations and Subcommittees on Agriculture, Financial Services and General Government, and Transportation, Housing and Urban Development. Congressman Young is also the founder and Chairman of the Bipartisan Congressional Task Force to Combat Identity Theft and Fraud - a group of dedicated legislators working towards commonsense solutions to protect all Americans from hackers, scammers, thieves and fraudsters.