November 30,2017

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202-224-4515, Katie Niederee & Julia Lawless

Debunking Senate Democrats’ Tax Reform Tales

Senate Tax Bill Includes Critical Provisions to Increase Middle-Class Wages, Grow the Economy and Make America More Competitive

The Tax Cuts and Jobs Act, which is being considered on the floor of the U.S. Senate, will put money back in the pockets of middle-class families, raise wages, grow the economy, and make America more globally competitive. This bill includes strong, pro-family provisions like doubling the child tax credit, nearly doubling the standard deduction, and lowering rates for working- and middle-class families. 

Unfortunately, we heard a number of false claims from Democrats that just don’t square with reality. Let’s debunk those false claims: 

Claim #1: Taxes will go up for American families making less than $75,000. 

Reality: This claim is false. A family of four making the median family income of $73,000 per year with four children will actually see their taxes go down by 60 percent under the Senate plan. This translates to $2,184 more money in their pocket per year. A single parent with one child earning $41,000 will see a tax reduction of nearly 75 percent, or $1,377 more in his or her pocket per year. 

Claim #2: Republicans are going to cut Medicare, Medicaid, Social Security and education. 

Reality: The tax proposal does not touch these popular programs. The non-partisan Congressional scorekeeper, the Joint Committee on Taxation (JCT) said just as much during the Finance Committee markup.

Claim #3: The Senate tax plan repeals the estate tax. 

Reality: The Senate tax plan scales back the distortive and inefficient effects of the tax that hurt family farms and small business, but it does not repeal the tax. 

Claim #4: The Senate tax proposal will throw 13 million Americans off their health insurance. 

Reality: The only change the Senate tax plan makes to the healthcare system is the repeal of the regressive Obamacare individual mandate tax that punishes poor Americans if they do not purchase health insurance that they do no not want or cannot afford. The plan does not touch the availability of premium tax credits or Medicaid. Anyone who likes their health insurance plan is not “kicked-off” or prohibited from purchasing it. This is backed up by JCT. The chief of staff for JCT said, at the Finance Committee markup, “There’s nothing that mandates that people give up insurance. It’s an economic decision.” 

Further, the individual mandate tax disproportionately hurts low-income Americans: 80 percent of American households that pay the tax make less than $50,000. 

Claim #5: Democrats have been shut out of the process. 

Reality: The door has always been open for Democrats. In fact, a number of provisions in the Senate tax plan have received strong Democratic support in the past. From lowering the corporate tax rate to expanding the child tax credit and lowering rates for the middle class, there are a number of provisions in the plan that Democrats have previously cheered. 

Further, a number of bipartisan amendments were included in the bill during its committee markup.  

Claim #6: The Senate tax plan raises taxes on graduate students. 

Reality: Graduate student tuition waivers are maintained under the Senate plan. Further, tax reform will lead to stronger economic growth, translating to more and better jobs, and higher wages, leaving graduate students with stronger prospects after they graduate.