House and Senate advance bills to reform the tax code

NY Times: House and Senate Republicans advance proposals for a “sweeping tax overhaul.” Republicans in the House of Representatives on November 16 voted to pass “the most sweeping tax overhaul in three decades,” according to The New York Times. The Times also noted that members of the Senate Finance Committee voted “to approve their version of the tax package” the same day. Both versions include a reduction in the corporate tax rate, and, as CNN noted, the Senate bill includes a provision to repeal the Affordable Care Act’s (ACA) individual mandate, which states that all Americans are to have health insurance or pay a small tax. From the Times article:

With 227 Republican votes, the House passed the most sweeping tax overhaul in three decades on Thursday, taking a significant leap forward as lawmakers seek to enact $1.5 trillion in tax cuts for businesses and individuals and deliver the first major legislative achievement of President Trump’s tenure.

The swift approval came two weeks after the bill was unveiled, without a single hearing on the 400-plus-page legislation and over the objections of Democrats and 13 Republicans. The focus now shifts to the Senate, where Republicans are quickly moving ahead with their own tax overhaul, which differs in substantial ways from the House bill.

After four days of debate, members of the Senate Finance Committee voted 14 to 12 along party lines to approve their version of the tax package late Thursday night. The approval helps clear the way for the full Senate to consider the bill after Thanksgiving, although it remains to be seen whether it has the support to pass the chamber. [The New York Times, 11/16/17; CNN, 11/14/17]

Right-wing media praise, spin, and lie about the proposals

Right-wing media figures backed the plan’s repeal of the ACA’s individual mandate

Conservative commentator Art Laffer: “I love getting rid of the mandate.” Conservative commentator Art Laffer, who served as economic adviser under former President Ronald Reagan, praised the plan to repeal the individual mandate, saying, “ I love getting rid of the mandate,” and adding, “I see no downside whatsoever.” From the November 15 edition of Fox News’ America’s Newsroom:

ART LAFFER: Well, I love getting rid of the mandate. It makes no sense, Bill. I mean, what they do is if someone decides they don't want Obamacare -- I don't want it -- then you get taxed. Well, that takes away this tax which allows you free choice. If you want ACA, you can have it. If you don’t want it, you don't have to have it and you don't have to pay a tax. So, I see no downside whatsoever to getting rid of the mandate. I think that’s wonderful. [Fox News, America’s Newsroom, 11/15/17]

Radio host Rush Limbaugh: “It would be so great to get rid of” the individual mandate. In an interview with Speaker of the House Paul Ryan (R-WI), conservative radio host Rush Limbaugh suggested that “it would be so great to get rid of” the individual mandate, adding, “You get rid of that, and you’ve taken the guts and the heart and the soul out of Obamacare.” From the November 7 edition of Premiere Radio Networks’ The Rush Limbaugh Show:

RUSH LIMBAUGH (HOST): It would be so great to get rid of -- you get rid of that, and you’ve taken the guts and the heart and the soul out of Obamacare.

PAUL RYAN: You have no argument from me. [Premiere Radio Networks, The Rush Limbaugh Show, 11/7/17]

Wash. Examiner’s Hadley Heath Manning: “We can offer Americans tax relief through repeal of Obamacare’s misguided and unproductive individual mandate.” In an op-ed titled “The individual mandate belongs in the trash heap,” Washington Examiner contributor Hadley Heath Manning claimed that lawmakers “can offer Americans tax relief through repeal of Obamacare’s misguided and unproductive individual mandate.” From the November 15 op-ed:

The individual mandate – the requirement that virtually all Americans obtain government-approved health insurance or pay a penalty — has long been the least popular part of the Affordable Care Act. Narrowly surviving a Supreme Court challenge in 2012, the mandate’s associated penalty has since technically been a “tax,” as it was only by the taxing power that the provision was found constitutional.

It would only be appropriate now for congressional leaders to repeal this mandate, or at least reduce the “tax” amount to $0, via tax reform legislation.

[...]

To really help hardworking Americans get the insurance coverage they need, our approach to healthcare should be very different from the Obamacare approach. We should focus on bringing down costs and offering consumers more options through more vibrant market competition. In the meantime, we can offer Americans tax relief through repeal of Obamacare’s misguided and unproductive individual mandate. [Washington Examiner, 11/15/17]

RedState’s JD Rucker: Trump should be “pushing legislators over the edge” to repeal the individual mandate. RedState writer JD Rucker suggested that President Donald Trump should be “pushing legislators over the edge” to ensure the individual mandate is repealed. From the November 19 post:

On this one occasion, I’d actually be okay with the President pushing legislators over the edge on a single issue: repealing the Affordable Care Act’s individual mandate as part of the tax cut bill. We’re close enough to the finish line that it wouldn’t be too overbearing for the President and his administration to strongly encourage keeping that component in the Senate version of the tax cut and carry it over to the House for passage. It would be ever-so-slight overreach, but in this one case, I can accept it. [RedState, 11/19/17]

Breitbart’s John Carney: Repealing the individual mandate is “a daring, controversial, and politically brilliant idea.” Breitbart writer John Carney called the proposal to repeal the individual mandate through the tax bill -- which was originally proposed by Sen. Tom Cotton (R-AR) -- a “daring, controversial, and politically brilliant idea.” Carney claimed repealing the mandate would help “simplif[y]” tax reform efforts because it would make “room for the expansion of child tax credits, local property tax credits, and small business tax credits without offending the sensibilities of deficit hawks.” From the November 16 Breitbart piece:

Senator Tom Cotton deserves credit for bringing Republicans around to a daring, controversial, and politically brilliant idea: repealing Obamacare’s individual mandate through the Republican tax overhaul.

[...]

Far from complicating tax reform efforts, the inclusion of the repeal simplifies it. According to the Congressional Budget Office, the repeal will save the government $338 billion over the next decade. That made room for the expansion of child tax credits, local property tax credits, and small business tax credits without offending the sensibilities of deficit hawks. [Breitbart, 11/16/17]

But repealing the individual mandate would cause millions to lose insurance and premiums to possibly go up

CBO: 13 million people would lose insurance if the individual mandate was repealed. The nonpartisan Congressional Budget Office (CBO) estimated that if the individual mandate was repealed in 2019, “the number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027.” [Congressional Budget Office, 11/8/17]

CBO: Premiums may go up by 10 percent if the mandate was repealed. The CBO also estimated that for some plans, premiums could go up “by about 10 percent in most years of the decade” on average if the mandate was repealed. [Congressional Budget Office, 11/8/17]

Conservative media figures denied that the bill would substantially benefit the wealthy

Fox’s Ainsley Earhardt: “If you read the tax plan,” it doesn’t say that “taxes are going to go up for the poorest people and down for the richest people.” Fox & Friends co-host Ainsley Earhardt said that “if you read the tax plan,” it does not say that “taxes are going to go up for the poorest people and down for the richest people.” From the October 16 edition of Fox News’ Fox & Friends:

AINSLEY EARHARDT (CO-HOST): But [Senate Minority Leader] Chuck Schumer [(D-NY)] was the one -- we aired that soundbite last week -- who said with the tax reform deal that taxes are going to go up for the poorest people and down for the richest people. Well, if you read the tax plan, that's not at all what it says. [Fox News, Fox & Friends, 10/16/17]

Fox News host Sean Hannity: “It is an absolute lie” that the tax reform bill “has anything of any benefit to anybody that is, quote, ‘rich.’” Sean Hannity asserted that it was “an absolute lie” that the tax bill “has anything of any benefit to anybody who is, quote, ‘rich.’” From the November 17 edition of Premiere Radio Networks’ The Sean Hannity Show:

SEAN HANNITY (HOST): I have known [Sen.] Orrin Hatch [(R-UT)] for all these years. I don’t think I’ve ever heard him that animated ever, because it is an absolute lie that this bill that they’re going to hopefully pass in the Senate, the Republican bill, has anything of any benefit to anybody that is, quote, “rich.” [Premiere Radio Networks, The Sean Hannity Show, 11/17/17]

Fox’s Trish Regan: The tax bill is “actually going to hurt high-income earners.” Fox Business host Trish Regan criticized Democrats for saying that the tax bill “is only going to benefit the wealthy,” claiming that the bill is “actually going to hurt high-income earners.” Co-host Lisa Boothe agreed, adding, “What she said.” From the October 15 edition of Fox News’ Outnumbered:

TRISH REGAN (CO-HOST): Second of all, I would also add the wealthy will pay more under this plan. So, I wish the Democrats would actually try and get their talking points right. The wealthy will pay more. And they're trying to say, “Oh, this is only going to benefit the wealthy.” No, it’s actually going to hurt high-income earners.

LISA BOOTHE (CO-HOST): What she said. [Fox News, Outnumbered, 11/15/17]

But the tax plans will disproportionately benefit the wealthy

Tax Policy Center: The Senate bill would decrease taxes for the wealthy while “taxes would rise modestly for the lowest-income group.” According to a November 20 analysis from the Tax Policy Center, under the Senate version of the bill, by 2027, “taxes would rise modestly for the lowest-income group, change little for middle-income groups, and decrease for higher-income groups.” Additionally, the analysis estimated, “Compared to current law, 9 percent of taxpayers would pay more in 2019, 12 percent in 2025, and 50 percent in 2027.” From the November 20 analysis:

The Tax Policy Center has released distributional estimates of the Senate version of the Tax Cuts and Jobs Act as passed by the Senate Finance Committee on November 16, 2017. We find the bill would reduce taxes on average for all income groups in both 2019 and 2025. In general, higher income households receive larger average tax cuts as a percentage of after-tax income, with the largest cuts as a share of income going to taxpayers in the 95th to 99th percentiles of the income distribution. On average in 2027, taxes would rise modestly for the lowest-income group, change little for middle-income groups, and decrease for higher-income groups. Compared to current law, 9 percent of taxpayers would pay more in 2019, 12 percent in 2025, and 50 percent in 2027. [Tax Policy Center, 11/20/17]

EPI: The tax bill would “deliver 80 percent of its benefits to the top 1 percent.” A report by the Economic Policy Institute (EPI) summarized an analysis from the Tax Policy Center and estimated that by 2027, “the Republican tax cut would deliver 80 percent of its benefits to the top 1 percent.” [Economic Policy Institute, 10/2/17]

Business Insider: The House tax bill “gives a few boosts to the wealthiest in the country,” including the repeals of the estate tax and the alternative minimum tax. Business Insider outlined “a few boosts to the wealthiest in the country” in the House version of the bill, including “the proposed repeals of the estate tax and the alternative minimum tax.” The article also said that investment fund managers -- including hedge fund managers -- would benefit from the carried interest provision, which allows them to “pay a lower capital gains tax rate on their share of their fund's profit.” [Business Insider, 11/16/17]

Right-wing media figures say corporate tax cuts will increase wages

Fox’s Ainsley Earhardt: The corporate tax cut means employers may give “more raises” meaning “more money in our pockets.” Fox & Friends co-host Ainsley Earhardt speculated that a lower corporate tax rate -- which is a part of the House and Senate bills -- would lead to “more money in our bosses’ pockets and, maybe, they will get more raises and more money in our pockets.” From the November 17 edition of Fox News’ Fox & Friends:

AINSLEY EARHARDT (CO-HOST): But the benefit of this tax plan is corporate tax rate would be lower.

PETE HEGSETH (CO-HOST): Yes.

EARHARDT: That means more jobs. That means more money in our bosses’ pockets and, maybe, they will get more raises and more money in our pockets. [Fox News, Fox & Friends, 11/17/17; USA Today, 11/17/17]

Fox’s Trish Regan “If you get a corporate tax cut, that’ll help” raise wages. Fox Business host Trish Regan asserted that “if you get a corporate tax cut, that’ll help” to raise wages. From the November 15 edition of Fox News’ Outnumbered:

TRISH REGAN (CO-HOST): We just need to get wages a little higher, which, hopefully, if you get a corporate tax cut, that’ll help. [Fox News, Outnumbered, 11/15/17]

Fox’s Rich Lowry: Lowering the corporate tax rate should “increase wages” and “economic growth.” Fox contributor and National Review editor Rich Lowry asserted that lowering the corporate tax rate “should, all things being equal, increase economic growth” and “increase wages.” From the November 14 edition of Fox News’ America’s Newsroom:

RICH LOWRY: The corporate side is really good. It’s a good reform. It should, all things being equal, increase economic growth -- which is good for everyone -- increase wages. [Fox News, America’s Newsroom, 11/14/17]

But analyses find that lowering the corporate tax rate does not boost wages for workers

EPI: “American workers should not expect any noticeable wage boost from cutting corporate income taxes.” An analysis by EPI stated, “Economic logic and evidence argues strongly that American workers should not expect any noticeable wage boost from cutting corporate income taxes.” [Economic Policy Institute, 10/25/17]

CBPP: “Most of the benefits from a corporate rate cut would go to those at the top.” An October 11 report from the Center on Budget and Policy Priorities (CBPP) explained that “most of the benefits from a corporate rate cut would go to those at the top, with only a small share flowing to low- and moderate-income families.” Additionally, the report found that “corporate rate cuts could even hurt most Americans since they must eventually be paid for with other tax increases or spending cuts.” From the report (emphasis original):

The evidence indicates that most of the benefits from a corporate rate cut would go to those at the top, with only a small share flowing to low- and moderate-income families. Mainstream estimates conclude that more than one-third of the benefit of corporate rate cuts flows to the top 1 percent of Americans, and 70 percent flows to the top fifth. Corporate rate cuts could even hurt most Americans since they must eventually be paid for with other tax increases or spending cuts. [Center on Budget and Policy Priorities, 10/11/17]

Conservative media figures claimed the U.S. has the highest corporate tax rates in the world

Fox’s Chris Wallace: The U.S. corporate tax rate is, “no question about it, the highest in the world.” In an interview with Sen. Chris Van Hollen (D-MD), Fox News Sunday anchor Chris Wallace asserted that the U.S. corporate tax rate is, “no question about it, the highest in the world.” From the November 12 edition of Fox Broadcasting Co.’s Fox News Sunday:

CHRIS WALLACE (HOST): But you certainly have to agree that the U.S. corporate tax rate, which is 35 percent -- which is, no question about it, the highest in the world. What’s wrong with lowering it to 20 percent, which puts it in line with other industrialized nations in the world? [Fox Broadcasting Co., Fox New Sunday, 11/12/17]

Townhall: The U.S. “has the highest corporate tax rates in the world.” Townhall writer Bruce Bialosky claimed the that U.S. “has the highest corporate tax rates in the world.” [Townhall, 11/12/17]

That talking point is misleading

CBPP: U.S. corporate tax rates are “in line with corporate rates in similar countries.” CBPP noted that the comparison between the corporate tax rates of the U.S. and other countries -- used by right-wing media, as well as the Trump administration and congressional Republicans -- is “misleading,” because “after accounting for tax breaks and loopholes, U.S. corporate rates are well below the 35 percent top statutory rate and are in line with corporate rates in similar countries.” From the center’s October 10 report:

The tax framework that the Trump Administration and congressional Republican leaders announced on September 27 would dramatically lower the top corporate tax rate, from 35 percent to 20 percent. President Trump has argued that the U.S. rate is among the world’s highest and makes U.S. companies “uncompetitive.” These comparisons are misleading. Rather than focusing on the top statutory rate, they should focus on what companies actually pay. And they should focus on large, high-income countries, which companies likely view as similar to the United States as potential places to locate and invest in for non-tax reasons. After accounting for tax breaks and loopholes, U.S. corporate rates are well below the 35 percent top statutory rate and are in line with corporate rates in similar countries. [Center on Budget and Policy Priorities, 10/10/17]