It just got real.
Until last Thursday, the discussion of massive changes to our nation’s tax system were based on a framework referred to as “the Trump tax plan.” But late last week, the House Republican majority introduced their budget-busting tax cut bill, spun as the “Tax Cuts and Jobs Act.” This proposal allows us to get a better sense of the potential impact of what would be the biggest change to our tax system in more than three decades.
Two of our national partners — the Institute on Taxation and Economic Policy and the Center on Budget and Policy Priorities — have examined the House GOP tax plan. While the measure has no shortage of flaws, here are three big takeaways from their analysis (see here and here for their reports), particularly in how they impact Oregonians:
1) The House GOP tax plan is heavily skewed in favor of rich Oregonians. While the typical Oregonian would see an $800 tax cut in 2018, the average member of the richest 1 percent would get a tax cut of over $32,000. This tax cut as a share of income is largest for the richest Oregonians.
2) Unless you’re rich, the House GOP tax plan gets worse over time. If the tax cuts seem unbalanced in 2018, just wait until we get to 2027. In the final year of implementation of the House GOP tax plan, the typical Oregonian would see their tax cut shrink to $450, while the average member of the richest 1 percent would have their tax cut grow to over $34,600.
3) The House GOP tax plan increases the federal deficit and the potential for future budget cuts that would harm most Oregonians. If enacted, the House GOP tax plan would blow a $1.5 trillion hole in the federal budget. As the past has shown, this deficit would serve as an excuse for proponents of the tax cuts in Congress to gut important programs for the neediest Oregonians. As the Center on Budget and Policy Priorities explains,
When deficits rise, those who supported the tax cuts will likely label these deficits as unacceptable and point to spending as the culprit. When that happens, they presumably will call for the kinds of deep cuts they’ve already proposed in their long-range budget plans, which would hit basic assistance for struggling low-wage families, including health care, education and training, child care, and other key investments that support broad economic growth and protect workers. Those cuts could happen as soon as next year.
The threat to vulnerable Oregonians from the House GOP tax plan is real. It’s serious.