The new tax package should have been titled “The Just Pass Something Tax Act.” It was enacted based on Republicans’ need to show that they can pass some significant legislation and to reward wealthy donors who had threatened to pull their support if Republicans didn’t pass a tax bill. So they needed to pass something.
President Trump and Congressional Republicans marketed middle-class tax relief that would not add to the deficit or debt and would make the tax system simpler. Instead, what they passed provides massive tax relief to corporations and also to many wealthy individuals. Many middle-class families will get tax cuts, often modest cuts, but others will experience tax increases. And while the corporate tax rate cuts are permanent, the middle-class tax relief is temporary, with taxes scheduled to increase.
Credible independent estimates, even taking into account any likely economic growth, suggest it would add at least $1 trillion of deficits over 10 years. This will force spending cuts that will hurt programs aimed at the same middle-class families who were supposed to benefit. And if bigger deficits and debt pose the same threats that Republicans told us they do during the Obama years, then we should expect higher interest rates and other serious economic repercussions.
On top of all this, Republicans have managed to take an inconceivably complex tax system and make it even more complicated. They rushed through a sloppy bill creating massive new loopholes for the wealthy. But, to their credit, they did pass something.