Tag: Tax cuts

The Next Big Fight Of Social Security, Medicare, And Medicaid

Fresh off passing massive tax cuts for corporations and the wealthy, Trump and congressional Republicans want to use the deficit they’ve created to justify huge cuts to Social Security, Medicare, and Medicaid.

As House Speaker Paul Ryan says “We’re going to have to get… at entitlement reform, which is how you tackle the debt and the deficit.”

Don’t let them get away with it.

Social Security and Medicare are critical safety-nets for working and middle-class families.

Before they existed, Americans faced grim prospects. In 1935, the year Social Security was enacted, roughly half of America’s seniors lived in poverty.  By the 1960s poverty among seniors had dropped significantly, but medical costs were still a major financial burden and only half of Americans aged 65 and over had health insurance. Medicare fixed that, guaranteeing health care for older Americans.

Today less than 10 percent of seniors live in poverty and almost all have access to health care. According to an analysis of census data, Social Security payments keep an estimated 22 million Americans from slipping into poverty.

Medicaid is also a vital lifeline for America’s elderly and the poor. Yet the Trump administration has already started whittling it away by encouraging states to impose work requirements on Medicaid recipients.

Republicans like to call these programs “entitlements,” as if they’re some kind of giveaway.  But Americans pay into Social Security and Medicare throughout their entire working lives. It’s Americans’ own money they’re getting back through these programs.

These vital safety nets should be strengthened, not weakened. How?

1. Lift the ceiling on income subject to the Social Security tax. Currently, top earners only pay Social Security taxes on the first $120,000 of their yearly income. So the rich end up, in effect,  paying a lower Social Security tax rate than everyone else. Lifting the ceiling on what wealthy Americans contribute would help pay for the Baby Boomers retirements and leave Social Security in good shape for Millennials.

2. Allow Medicare to negotiate with drug companies for lower prescription drug prices. As the nation’s largest insurer, Medicare has tremendous bargaining power. Why should Americans pay far more for drugs than people in any other country?

3. Finally, reduce overall health costs and create a stronger workforce by making Medicare available to all. There’s no excuse for the richest nation in the world to have 28 million Americans still uninsured.

We need to not just secure, but revitalize Social Security and these other programs for our children, and for our children’s children.  Millennials just overtook Baby Boomers as our nation’s largest demographic.  For them — for all of us — we need to say loud and clear to all of our members of congress:  Hands off Medicare, Medicaid, and Social Security. Expand and improve these programs: don’t cut them.

GOP Tax Plan Viewpoints

With any piece of legislation, it is important to understand the reasons that people give for why it should be implemented, why it should not be implemented, and the data behind those reasons. The GOP tax plan is the largest overhaul in U.S. history. As we read about this piece of legislation, many of us  exist in echo chambers where we can only read and see one viewpoint. 

In this article, we expose you to varying viewpoints on the tax plan


On December 6th, Senator Mitch McConnell put out a press release entitled “One Step Closer to Tax Reform.” In this press release he indicates his support for the bill, the process, and his colleagues.

Specifically, he argues that the bill is much needed, and wanted, reform: ” Senators answered the calls of our constituents by voting to overhaul our complex and outdated federal tax code. We seized the opportunity to spur economic growth, to help create jobs right here at home, and to take more money out of Washington’s pocket and put more money into the pockets of hardworking American families”

He also points positively to portions of the bill that repeal the individual mandate and expands drilling opportunities in Alaska: ““Our bill also helps provide for our country’s energy security by further developing Alaska’s oil and gas potential in an environmentally responsible way. And it delivers relief to low- and middle-income Americans by repealing Obamacare’s individual mandate tax.”


The Senate vote on the tax plan was almost completely on party line. However, there was one Republican Senator who voted against the tax plan.

In his press release from December first, Senator Corker states that he was not able to vote for the plan due to the large increase to the federal deficit within the plan.

“My concern about the impact a rapidly growing $20 trillion national debt will have on our children and grandchildren has been a guiding principle throughout my time in public service… From the beginning of this debate, I have been a cheerleader for legislation that – while allowing for current policy assumptions and reasonable dynamic scoring – would not add to the deficit and set rates that are permanent in nature.”

He argues that “pro-growth policies” are not mutually exclusive from deficit neutral policies and says that he believes ” it would have been fairly easy to alter the bill in a way that would have been more fiscally sound without harming the pro-growth policies.”

The decision to vote agains the tax plan was clearly a difficult one for him. However, his commitment to reducing the debt was the stronger influence on Senator Corker.


The House was the first chamber of Congress to pass their version of the GOP tax plan on November 16th. Before it was passed, Representative Raúl Grijalva put out a press release outlining his opposition to the bill.

He states that he opposes it due to the fact that the economic theory upon which the plan is based has never worked: “The details of the Trump-Ryan tax plan reveal the same-old tried-and failed formula of trickle-down economics that does nothing to help America’s working families…History shows that massive corporate tax cuts do nothing to spur job growth and in many cases corporations who have reaped those benefits end up cutting American jobs.”

The redistribution of wealth, and ultimate outsourcing of jobs in the bill was also a point of contention for Senator Grijalva: “In ten-year’s time, 80% of the Republican’s tax breaks will exclusively benefit the top 1% of those making close to a million dollars, while one in four Americans will see a tax increase. This tax plan is a complete scam that does little to help working families.” and “Their territorial international plan is the ultimate job outsourcer by ending or dramatically lowering taxes on foreign profits and cementing the practice of offshoring American jobs.”

Senator Grijalva warns that this bill (and particularly the increase to the deficit) “provides Republicans with the ammunition they are after to force trillions of dollars in cuts from Social Security, Medicaid, education and other essential programs.”


On December 2nd, Independent Senator Angus King also put forward a press release opposing the GOP tax bill after its passage.

He first criticizes the way in which the bill was passed: “I’m disappointed, and I’m angry, because the American people deserve better. For months, moderates in the Senate reached across the aisle to colleagues – and friends – asking them to sit down and work together on a commonsense tax reform bill that supports hardworking Americans and fosters economic growth for businesses in Maine and across the country. In other words: to govern.”

Next, he argues that this bill does not do help hardworking Americans, instead, it raises the deficit and places the burden on American children: “This Senate has decided to pass a bill that helps the few instead of the many, and shifts a massive financial burden onto our children. Rather than maximize this opportunity to help working Americans and set our nation on a path to further prosperity, this bill pushes through at least $1 trillion in unfunded tax cuts for the wealthy and for corporations.”

The GOP’s Rush To Tax Cuts Was Brainless

I am writing from Beijing, China, where forward-looking policies in infrastructure, technology and diplomacy have fueled rapid economic growth and even more remarkable technological advancement. By the mid-2020s, China will most likely lead the world in key technologies for low-carbon energy, robotics and advanced transportation, among other areas targeted in China’s long-term development strategy.

In this context, the vacuity of US economic policy is especially poignant. President Donald Trump and Republican congressional leaders are rushing to spend a trillion dollars or more on unaffordable tax cuts for the richest Americans in a stunning monument to brainlessness.

The analyses by the Congressional Budget Office, the Joint Tax Committee and almost all independent experts come to the same conclusion. The tax cuts will have large effects on the budget deficit and negative effects for low-income Americans. The CBO has found that healthcare measures in the bill would reduce health coverage by 13 million Americans in 2027. The Joint Tax Committee has found that the growth effects are tiny and perhaps negative in the long term, once various short-term tax incentives are phased out and the public debt increases over time.

Does any of this matter to the President, Mitch McConnell, Paul Ryan and most Republican members of Congress? No. The mega-donors of the Republican Party, who pull the strings, will reap vast tax savings whether or not there is growth, huge deficits, soaring public debt or harm to the poor. Trump and family will win big, despite Trump’s absurd claims to the contrary. This is a cabal that long ago gave up any interest for mainstream Americans, much less for the down and out.

What has happened to American democracy? It has gotten poisoned by partisanship and by big money, in both parties. In early 2009, President Barack Obama and House Speaker Nancy Pelosi designed a “stimulus” bill behind closed doors at the cost of almost $1 trillion. They claimed at the time, wrongly in my view, that hundreds of billions of dollars of hastily-designed transfer payments and other public outlays were necessary to save the country from a great depression. They passed that mega-spending bill without a single Republican vote in the House of Representatives. Paul Krugman assured us at the time, and for a long time after, that deficits in a recession don’t matter (despite the fact that the debt would remain well after the downturn was over). Eight years later, the public debt is at 77% of GDP, up from around 39% at the time of the stimulus legislation.

Now the Republicans are doing the same thing — passing a budget-busting bill without a single Democrat on their side, and before anybody has had a moment to read it. They will drive the government debt far higher, perhaps to 100% of GDP, since the current baseline is one of high and rising deficits over the coming decade. Their proposed legislation is far more noxious than the 2009 stimulus, since the tax cuts are designed to flow to the richest Americans, at a direct and immediate cost to poor Americans.

I’m amazed that we even had the last-minute reports by the Congressional Budget Office and the Joint Tax Committee, so determined were Trump and the Republicans to vote without any evidence at all. The President, for his part, has repeatedly smeared the CBO to discredit any honest non-partisan thinking in Washington.

Our political crisis is so dire that we will be lucky to avoid a nuclear war, much less a soaring budget deficit. The world looks on in fear and astonishment, with the overpowering sense that America has become a danger to itself and the world, shortsighted, deeply divided and unwilling to consider the common good.

The GOP Tax Plan: Who Pays More?

The media is currently filled with analyses, reports, and opinions about the  GOP tax plan. With a lot of information out there, it is important to understand the key points. Education is the first step towards making a difference.

So what do you need to know about the tax plan?

It is a regressive plan. This means that it is better for the rich, and worse for the poor. You can clearly see this in a chart put together by the Congressional Budget Office. They list out, in millions, the net changes in federal revenues by income category and by year. Each cell represents how much revenue the federal government will gain or lose from that income category in that year.

For instance, Americans making $35,000 a year will pay 3,920,000,000 less to the government in 2019 but will pay 7,610,000,000 more to the government in 2027.

We have taken a portion of that chart and color coded it. The red cells represent that the federal government will receive more money from that income category in the form of taxes, the blue cells represent that the federal government will receive less from that income category.



Lower income categories will clearly pay more to the government while higher income categories will pay less. Below is a visual representation of this data.



This tax plan, however, does not approach the issue solely through income categories. It makes a number of changes to the tax code that influence some people and not others (e.g. whether they have children, whether they would have to pay the Estate Tax.)

Therefore, the overarching amount of revenue gathered by the federal government doesn’t show the full picture of the chances of an individual in that income bracket receiving a tax cut or a tax increase. The graph below shows the percent of each quintile of the population (The population is split into 5th based on income) that would receive a tax cut and the percent that would receive a tax increase.

Like the previous graph, the regressive nature of the tax plan is clear. The top quintile is the only quintile where a greater percentage will receive tax cuts than tax increases. Just over half (53%) of the top quintile will see tax cuts, while 45.7% will see tax increases.

Breaking this down even further: the top 1% and 0.1% in particular will receive the most tax cuts with 83% and 98.1% respectively receiving tax cuts.



This analysis is by no means exhaustive, but we hope that it will give you a better sense of the regressive nature of the GOP tax plan.

Congressional Budget Office Cost Estimate: The Tax Cuts And Jobs Act

The Reconciliation Recommendations of the Senate Committee on Finance, the Tax Cuts and Jobs Act, would amend numerous provisions of U.S. tax law. Among other changes, the bill would reduce most income tax rates for individuals and modify the tax brackets for those taxpayers; increase the standard deduction and the child tax credit; and repeal deductions for personal exemptions, certain itemized deductions, and the alternative minimum tax (AMT).

Those changes would take effect on January 1, 2018, and would be scheduled to expire after December 31, 2025. The bill also would permanently repeal the penalties associated with the requirement that most people obtain health insurance coverage (also known as the individual mandate).

The legislation would permanently modify business taxation as well. Among other provisions, beginning in 2019, it would replace the structure of corporate income tax rates, which has a top rate of 35 percent under current law, with a single 20 percent rate. The legislation also would substantially alter the current system under which the worldwide income of U.S. corporations is subject to taxation.

The staff of the Joint Committee on Taxation (JCT) estimates that enacting the legislation would reduce revenues by about $1,633 billion and decrease outlays by $219 billion over the 2018-2027 period, leading to an increase in the deficit of $1,414 billion over the next 10 years. A portion of the changes in revenues would be from Social Security payroll taxes, which are off-budget. Excluding the estimated $27 billion increase in off-budget revenues over the next 10 years, JCT estimates that the legislation would increase on-budget deficits by about $1,441 billion over the period from 2018 to 2027. Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.

JCT estimates that enacting the legislation would not increase on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2028.

Because of the magnitude of its estimated budgetary effects, the Tax Cuts and Jobs Act is considered major legislation as defined in section 4107 of H. Con. Res. 71, the Concurrent Resolution on the Budget for Fiscal Year 2018. It therefore triggers the requirement that the cost estimate, to the greatest extent practicable, include the budgetary impact of the bill’s macroeconomic effects. The staff of the Joint Committee on Taxation is currently analyzing changes in economic output, employment, capital stock, and other macroeconomic variables resulting from the bill for purposes of determining these budgetary effects. However, JCT indicates that it is not practicable for a macroeconomic analysis to incorporate the full effects of all of the provisions in the bill, including interactions between these provisions, within the very short time available between completion of the bill and the filing of the committee report.

CBO and JCT have determined that the tax provisions of the legislation contain no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).


The estimated budgetary effects of the Tax Cuts and Jobs Act are shown in the table below.


Revenues and Direct Spending

The Congressional Budget Act of 1974, as amended, stipulates that JCT’s estimates of revenues will be the official estimates for all tax legislation considered by the Congress. Therefore, CBO incorporates JCT’s estimates into its cost estimates of the effects of legislation. JCT provided virtually all estimates for the provisions of the bill, but JCT and CBO collaborated on the estimate of the provision that would eliminate the penalties associated with the requirement that most people obtain health insurance coverage.1 The date of enactment of the bill is generally assumed to be December 1, 2017.

JCT estimates that, together, the provisions contained in the legislation would decrease federal revenues, on net, by about $38 billion in 2018, by $972 billion over the period from 2018 to 2022, and by $1,633 billion over the period from 2018 to 2027. Net outlays would be nearly unchanged in 2018, and would decrease by $46 billion from 2018 to 2022, and by $219 billion over the period from 2018 to 2027. On net, deficits would increase by $38 billion in 2018, by $926 billion from 2018 to 2022, and by $1,414 billion from 2018 to 2027. A portion of those effects reflect changes to revenues from Social Security taxes, which are off-budget. JCT estimates that over the 2018-2027 period, the bill would increase on-budget deficits by $1,441 billion and reduce off-budget deficits by $27 billion.



Tax Changes for Individuals. The bill would make numerous changes to tax law pertaining to individuals.

JCT estimates that the individual tax provisions would, on net, reduce revenues by $1,119 billion from 2018 to 2027. Those provisions also would decrease outlays by an estimated $233 billion over the 2018-2027 period. Some provisions would increase off-budget revenues by $20 billion over the period from 2018 to 2027, JCT estimates. On-budget revenues would decrease by an estimated $1,139 billion.

Revenue-Reducing Provisions. Provisions that are estimated to reduce revenues over the 2018-2027 period include the following, which would take effect on January 1, 2018 and expire on December 31, 2025:

  • Modify the seven tax brackets in place under current law to create brackets with rates of 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 38.5 percent;
  • Increase the standard deduction;
  • Repeal the individual AMT (Alternative Minimum Tax);
  • Allow a 17.4 percent deduction, subject to certain limits, for qualified business income that individuals receive from pass-through entities, namely partnerships, S corporations, and sole proprietorships;
  • Increase the child tax credit to $2,000, and, among other related changes, provide a new $500 credit for certain other dependents; and
  • Double the exemption allowed under estate and gift taxes.

According to JCT’s estimates, the largest revenue reductions would result from the provision that would modify income tax rates and brackets: Revenues would fall by $1,165 billion and outlays for refundable tax credits would increase by $9 billion over the 2018-2027 period. The increase in the standard deduction would reduce revenues by $654 billion and increase outlays for refundable tax credits by $83 billion over the same period, JCT estimates. Repealing the individual AMT would reduce revenues by $769 billion from 2018 to 2027.

JCT also estimates that the bill’s provisions that provide a deduction for qualifying income from pass-through entities would reduce revenues by $362 billion over the 2018-2027 period and that modifications to the child tax credit would, over the same period, reduce revenues by $431 billion and increase outlays for refundable tax credits by $154 billion. JCT estimates that additional revenue reductions, totaling $83 billion from 2018 to 2027, would result from the modifications to estate and gift taxes.

Revenue-Increasing Provisions. Provisions that are estimated to increase revenues over the 2018-2027 period would:

  • Repeal deductions for personal exemptions through 2025;
  • Repeal certain itemized deductions, including those for state and local taxes and interest on home equity indebtedness, also through 2025;
  • Disallow immediate use of certain losses by active owners of pass-through entities; and
  • Permanently index tax parameters to the chained consumer price index instead of the traditional consumer price index.

The largest revenue increases would result from the provision to repeal deductions for personal exemptions, which JCT estimates would increase revenues by $1,086 billion and reduce outlays for refundable credits by $134 billion over the 2018-2027 period. JCT estimates that the repeal of certain itemized deductions also would increase revenues by $974 billion and reduce outlays for refundable credits by $3 billion from 2018 to 2027.

Substantial but smaller increases in revenues would result from two other provisions. First, disallowing certain losses by pass-through entities would increase revenues by an estimated $137 billion over the 2018-2027 period. Second, the change in the inflation measure used to index tax parameters would increase revenues by $115 billion and reduce outlays for refundable credits by $19 billion over the 2018-2027 period, according to JCT’s estimates.

Repealing the Individual Mandate. The bill’s most significant effects on outlays would occur as a result of the elimination, beginning in 2019, of the penalties associated with the individual mandate. CBO and JCT estimate the following effects of that provision:

  • Federal budget deficits would be reduced by about $318 billion between 2018 and 2027, consisting of estimated reductions in outlays of $298 billion and increases in revenues of $21 billion over the period;
  • The number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027;
  • Nongroup insurance markets would continue to be stable in almost all areas of the country throughout the coming decade; and
  • Average premiums in the nongroup market would increase by about 10 percent in most years of the decade (with no changes in the ages of people purchasing insurance accounted for) relative to CBO’s baseline projections. In other words, premiums in both 2019 and 2027 would be about 10 percent higher than is projected in the baseline.

Those effects would occur mainly because healthier people would be less likely to obtain insurance and because, especially in the nongroup market, the resulting increases in premiums would cause more people to not purchase insurance. In this estimate for the Tax Cuts and Jobs Act, the estimated reduction in the deficit is different from a CBO and JCT estimate published on November 8, 2017.2 The differences occur because the provision of this legislation eliminates the penalties associated with the mandate but not the mandate itself and because of interactions with other provisions of the bill.

Business-Related Tax Changes. The bill would make many permanent changes to business taxes. The provisions with the largest effects on revenues, as estimated by JCT, are those that would:

  • Replace, starting in 2019, the current graduated structure of corporate income tax rates, which has a top rate of 35 percent under current law, with a single 20 percent rate;
  • Limit the deduction for net interest expenses to the sum of business interest income and 30 percent of an adjusted measure of taxable income; and
  • Limit the deduction for past net operating losses to a portion of current taxable income, and generally repeal the two-year period over which losses may be carried back to previous tax years.

JCT estimates that those tax provisions would, on net, reduce revenues by $669 billion from 2018 to 2027. In addition, those provisions would increase outlays for refundable tax credits by an estimated $14 billion over the 2018-2027 period.

JCT estimates that the modifications to the rate structure, including reducing the top corporate tax rate from the 35 percent that is assessed on most taxable income to a 20 percent rate that would apply to all amounts of taxable income, would reduce revenues by $1,329 billion over the 2018-2027 period. JCT also estimates that limiting the deductions for interest expenses would increase revenues by $308 billion and that limiting the use of net operating losses would raise revenues by $158 billion over the same period.

The outlay effects from the business provisions would result from repealing the corporate alternative minimum tax. That change would reduce receipts by $26 billion and increase outlays by $14 billion over the period from 2018 to 2027, according to JCT’s estimates.

International Tax Changes. The bill would substantially modify the current system of taxation of worldwide income of U.S. corporations, generally including foreign earnings in taxable income when paid to businesses as dividends by their foreign subsidiaries and with an allowance for tax credits for certain foreign taxes that businesses pay. Under the Tax Cuts and Jobs Act, the tax system would provide an exemption for dividends paid by a foreign corporation to its U.S. parent, and no foreign tax credits would be allowed for taxes paid on the amount of such dividends. Other changes also would be implemented. The international tax provisions with the largest estimated effects on revenues are those that would:

  • Provide a deduction for the foreign-source portion of dividends received by domestic corporations from certain foreign corporations;
  • Require that certain untaxed foreign income of U.S. corporations be deemed to be immediately paid to those corporations as dividends and included in taxable income, subject to taxation at a rate of 10 percent (or 5 percent for certain illiquid assets), and with an option to spread the resulting tax payments over an eight-year period with 60 percent paid in the final three years;
  • Impose on U.S. corporations a minimum tax of 10 percent (12.5 percent starting in 2026) on a tax base that excludes certain otherwise tax-deductible payments to foreign affiliates; and
  • Require that U.S. corporations immediately include in taxable income certain amounts earned from low-taxed investments by foreign subsidiaries.

JCT estimates that the provisions related to international taxation would, on net, increase revenues by $155 billion from 2018 to 2027. It also estimates that the deduction for dividends received from foreign corporations would reduce revenues by $216 billion over that period. JCT estimates that three other provisions would have large budgetary effects that would increase revenues from 2018 to 2027. Those provisions would require a deemed repatriation of untaxed foreign income ($185 billion), impose a new minimum tax ($138 billion), and require the immediate inclusion in taxable income of certain amounts earned by foreign subsidiaries ($135 billion).

Revenue-Dependent Repeals. The bill would make parts of six business and international taxation provisions dependent on future revenue collections. The parts that would be affected generally begin in 2026, and would increase revenues in 2026 and 2027. Those amounts are incorporated into the overall revenue effects shown in the estimate of this legislation. The provisions include those that would require that certain research or experimental expenditures be amortized, that would limit the deduction for net operating losses, and that would impose a minimum tax on a tax base that excludes certain otherwise tax-deductible payments to foreign affiliates.

Under the legislation, the parts of those provisions beginning in 2026 would not take effect if an overall revenue target was reached. Specifically, if on-budget revenues for the period from 2018 to 2026 exceeded $28.387 trillion, then those revenue-raising provisions would be repealed starting in 2026. Under CBO’s latest baseline revenue projections, adjusted to include the revenue effects of the bill (without incorporating any macroeconomic feedback), the on-budget revenue target would not be reached and therefore the revenue-raising modifications would occur. JCT has estimated that the revenue-dependent repeals would have a negligible effect on revenues. Given variations in inflation, economic output, and many other economic developments that affect revenues, including the response of overall economic activity to this legislation, there is some probability that the target would be reached and that the modifications to those provisions, and the resulting revenues, would not occur.


The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays and revenues that are subject to those pay-as-you-go procedures are shown in the following table. Only on-budget changes to outlays or revenues are subject to pay-as-you-go procedures.




Section 4107 of H. Con. Res. 71 requires that CBO and JCT’s estimates of budgetary effects for major legislation include, to the extent practicable, the legislation’s distributional effects across income categories.

JCT has published a distributional analysis of the Tax Cuts and Jobs Act that includes the effects of the bill on revenues and on the portion of refundable tax credits recorded as outlays.3 That analysis included effects on outlays for premium tax credits stemming from eliminating the penalty associated with the requirement that most people obtain health insurance coverage. However, other spending related to eliminating that penalty was not included, specifically changes in spending for Medicaid, cost-sharing reduction payments, the Basic Health Program, and Medicare.

CBO has separately allocated across income groups the budgetary effects of those other changes for an earlier version of the legislation, under consideration by the Senate Finance Committee; those estimates also apply to the bill as ordered reported.4 In making those estimates, CBO did not attempt to estimate the value that people place on such spending, which may be different from the actual cost to the government of providing the benefits. CBO also did not attempt to make any distributional allocations for people who would choose to obtain unsubsidized health insurance in the nongroup market and who face higher premiums there compared with what would occur otherwise.

The combined distributional effect of the provisions estimated by JCT and CBO, thus representing the total distributional effect of the bill, was calculated by subtracting the estimated change in federal spending from the change in federal revenues allocated to each income group. The resulting changes in the federal deficit allocated to each income group are reflected in the following table.



Overall, the combined effect of the change in net federal revenues and spending is to decrease deficits (primarily stemming from reductions in spending) allocated to lower-income tax filing units and to increase deficits (primarily stemming from reductions in taxes) allocated to higher-income tax filing units. Those effects do not incorporate any estimates of the budgetary effects of any macroeconomic changes that would stem from the proposal.


JCT estimates that enacting the legislation would not increase on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2028.


CBO and JCT have determined that the legislation contains no intergovernmental or private-sector mandates as defined by UMRA.

Does More Government Help Or Hurt The Economy?

Kansas is presented as a case study as Kansas cut taxes on job creators to the point where the bottom 20% are paying on average $166 more in income tax while the 1% are paying nearly $20,000 less. Rather than seeing an increase in job creation, Kansas’ job creation is lagging behind the national average. The speech concludes with suggestions for government spending that would boost the economy: federally funded jobs program, infrastructure investment, investment in education, and investment in research & technology.