EDITORIAL: More tax surprises on way for middle class
Middle-class taxpayers from York County to Yorba Linda, California, have been suffering various levels of myocardial infarction this tax season as they learn that traditionally relied-upon rebates are either unrecognizably undersized or entirely nonexistent.
In many cases, Uncle Sam actually has his hand out.
That’s because the middle class didn’t get anywhere near the type of tax benefits gifted to the wealthy and business interests when congressional Republicans bum-rushed their massive tax overhaul to President Donald Trump’s desk in late 2017.
Send thank-you cards to your local Republican legislative contingent — if you can afford the stamps.
Sen. Pat Toomey and Reps. Lloyd Smucker and Scott Perry were among the enthusiastic supporters of the brazen tax grab — cobbled together behind closed doors with no Democratic input, rushed through Congress with no hearings, and passed in the Senate via characteristic rule-bending by Majority Leader Mitch McConnell to avoid a filibuster and require only a 51-vote majority (which is all it got).
As a result, the rich are paying considerably less in taxes, thanks to lower tax brackets, new tax thresholds and expansion of exemptions like those on the federal estate tax. Businesses faired even better: The corporate tax rate plummeted from 35 percent to 21 percent.
These immense — and immensely unnecessary — tax breaks will add some $1.5 trillion to the national debt over the next decade.
Indeed, their effects are already being felt.
The national debt recently sailed past the $22 trillion mark with no signs of slowing. The Congressional Budget Office projects this year’s deficit will add another $897 billion, a 15 percent hike over last year’s imbalance of $779 billion.
Those bills are basically all that Working Joes and Joannes will have to show for this tax farce. As many are finding out now that we’re in tax-filing season, the relative pittance of a bump they saw in their paychecks was made up largely of what would have been their annual tax refund.
But then, despite insistence from Trump and Republican leaders that middle-class families were to be the chief beneficiaries, they were, in fact, hardly front-of-mind.
One western New York lawmaker gave up the game.
“My donors are basically saying, ‘Get it done or don't ever call me again,’” Rep. Chris Collins told reporters.
Yup, the donors.
Those deep-pocketed and corporate interests from whom we have heard very little complaint this tax-filing season.Meanwhile, the nonpartisan Urban-Brookings Tax Policy Center estimates that 5 percent of Pennsylvania’s taxpayers will see a tax increase under the new law.
And while the Tax Policy Center says the law reduces individual income taxes by about $1,260 “on average,” that average includes the massive breaks for the wealthy, leaving pennies on the dollar for low-end and middle-class earners.
The top 5 percent of earners, for example, will realize more than 40 percent of the tax cuts.
Adding insult to financial injury: The new tax law eliminates and/or caps personal exemptions and many valuable itemized deductions.
All of these changes are hurting the working class and poor disproportionately (as Republican initiatives so often do).
As the Associated Press reported, “Americans have come to rely on refunds. About three-quarters of U.S. taxpayers typically get one, and they had averaged around $2,800. For some low-income households it is the biggest cash infusion of the year.”
But the IRS says total refunds are down some 16 percent so far this year, and refund amounts are off nearly 10 percent.
And guess what?
It will only get worse going forward.
Those budget-busting tax benefits for the corporate and wealthy interests are here to stay. But the miserly upticks for the middle class? They’ll melt away by 2025.
All that will be left will be all that debt created as taxpayers line the pockets of moneyed interests.