Remember the 2017 Republican tax cut -- the one that they called a "middle class tax cut"? As you surely know by now, most of those tax cuts went to the rich and corporations (over 80%). The middle class only got a tiny cut, and the working class got nothing. Well, it's about to get even worse!
There was a hidden part of that bill that starts to raise taxes on everyone (except for the rich) in 2021, and will keep raising those taxes every two years until 2027. By 2027, three-quarters of the population will be paying more taxes than before the cut. But the other quarter, those making over $100k, will get to keep their cuts.
The bill was never fair for most Americans, and now it will get even more unfair.
Here's part of how economics professor Joseph Stiglitz explains it in The New York Times:
The Trump administration has a dirty little secret: It’s not just planning to increase taxes on most Americans. The increase has already been signed, sealed and delivered, buried in the pages of the 2017 Tax Cuts and Jobs Act.President Trump and his congressional allies hoodwinked us. The law they passed initiallylowered taxes for most Americans, but it built in automatic, stepped taxincreases every two years that begin in 2021 and that by 2027 would affect nearly everyone but people at the top of the economic hierarchy. All taxpayer income groups with incomes of $75,000 and under — that’s about 65 percent of taxpayers — will face a higher tax rate in 2027 than in 2019.
For most, in fact, it’s a delayed tax increase dressed up as a tax cut. How many times have you heard Trump and his allies mention that? They surmised — correctly, so far — that if they waited to add the tax increases until after the 2020 election, few of the people most affected were likely to remember who was responsible.
Looking at the analyses of the nonpartisan Congressional Budget Office and the Joint Committee on Taxation at the time the December 2017 tax bill was enacted, we see very clearly how different income groups are affected by the Trump tax plan. And it’s disturbing.
The current poverty line for a family of four is $26,200: People with incomes between $10,000 and $30,000 — nearly one-quarter of Americans — are among those scheduled to pay a higher average tax rate in 2021 than in years before the tax “cut” was passed. The C.B.O. and Joint Committee estimated that those with an income of $20,000 to $30,000 would owe an extra $365 next year — these are people who are struggling just to pay rent and put food on the table.
Of course, the poor have never mattered much to the Republican Party, but those on the edge of poverty have been particularly hard hit by the pandemic and the recession it has caused, so Trump’s planned tax increases seem especially heartless, and impractical, when you consider that their higher tax payments, while a huge burden for them, will add little to the budget.
By 2027, when the law’s provisions are set to be fully enacted, with the stealth tax increases complete, the country will be neatly divided into two groups: Those making over $100,000 will on average get a tax cut. Those earning under $100,000 — an income bracket encompassing three-quarters of taxpayers — will not.
