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It's been an insane TaxDay and I'm still in the office waiting for my hashtag analysis piece to publish, so let's do some tax-storming, ok?
1. Let's talk about how this bill affects the middle class.
2. This is a central question, politically and economically. Republicans are selling this bill as a middle class tax cut. Dems call it a con
3. And there are a lot of ways to slice the question, Is this the 'massive' middle class cut that President Trump has promised?
4. We'll start with the battle of the sample families, as @RichardRubinDC calls it. GOP says fam of 4 making $59k gets a $1,100 tax cut
4a. But @davidckamin argues, in a new analysis, that the GOP sample family wud see a tax *hike* by 2024, relative to current law
4b. That's bc a $300 family flexibility credit expires after 5 yrs (GOP says they would fight to extend, btw) & bill changes to chained CPI
5. MEANWHILE. I've been playing around with TaxBrain, with the help of @MattHJensen & others.
6. Early analysis, using TaxBrain, suggests House bill would result in a tax *increase* on 13 million filers who earn <$100k in year one.
6a. That's 13 million low/middle-income filers who'd see a tax increase right away.
7. Bill def includes goodies for middle class, in terms of lower rates and doubled standard deduct, and average filer at $50k gets tax cut
8. But it also eliminates a lot of tax breaks on things we think of as linked to middle class / econ mobility.
9. ...student loan interest, moving costs if you're chasing a dream job and, if you chase it to high-$ city, limits on mortgage deduction
9a (I suspect conservative economists like @MichaelRStrain might have things to say abt discouraging geographic mobility)
10. If you had "now he's going to pivot to corporate tax incidence" in the pool, congrats!
11. The big middle class sell of this bill has been, and probably will continue to be, the idea that biz rate cuts will boost worker wages
12. That's why the wonky fight between @WhiteHouseCEA &other econs lately matters so much. If CEA is right, this bill wud be clear MC win
13. But if you don't believe corporate cuts will supercharge wages ... there's a lot of questions here.
This is the middle-class mystery of the House tax bill. Read all about it: nytimes.com/2017/11/02/us/…
I think it's time to drink now.
