Fact Check: Yes, the Overwhelming Majority of Americans Got a Tax Cut Under the GOP-Passed Law

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Posted: Jan 29, 2019 10:25 AM
Fact Check: Yes, the Overwhelming Majority of Americans Got a Tax Cut Under the GOP-Passed Law

Source: Screenshot via Fox News

While commenting on the national debt -- and the respective policies of Howard Schultz and Kamala Harris -- during a Fox News segment, I got into a spirited exchange with Democratic strategist Mary Anne Marsh.  I laid out the facts about the price tag of single-payer healthcare, noting that the US federal government spent just over $4 trillion last year, while running a deficit of nearly $800 billion.  "Medicare for All," which Harris endorsed in her campaign launch speech, would add at least $3.2 trillion in new spending to the annual budget -- a staggering increase of roughly 80 percent.  The only way to achieve anything close to that outcome, I correctly said, would be to impose massive tax increases on middle-income and working class Americans. 

Marsh jumped in to claim that Republicans have surrendered any ability to warn about deficits and debt because of the 2017 tax law.  In making this point, the crux of which I'll address below, she also asserted that the new law merely serves a "teeny weeny" fraction of the very wealthy, dismissing my point that nearly all taxpayers have seen their tax burdens reduced as a result of the tax reform package.  Watch:


At the tail end of the clip, I said "tax cuts" instead of "tax increases," but my meaning was clear.  A few thoughts:

(1) The math is the math on single-payer healthcare.  Saying, "but the tax cuts!" is not an explanation of how three-to-four trillion more dollars in annual federal spending would be financed.  The only answer is enormous, across-the-board tax hikes, affecting every single American.  If that's Democrats' plan, they should say so candidly.  But they can't, because they know telling that truth would crush popular support for the idea:


(2) There is absolutely no comparison between the "cost" of the tax law ($1.5 to $1.9 trillion over ten years) and the cost of 'Medicare for All' ($32 to $38 trillion over ten years).  I fundamentally reject the notion that allowing Americans to keep more of the money they earn should count as government spending, but it's also undeniable that such reforms have fiscal impacts.  Federal tax revenues hit a record high in 2018, partially boosted by a strong economy -- which, in turn, was fueled by tax reform and deregulation.  And US revenues as a percentage of GDP remain at or around multi-decade averages.  As I've written repeatedly, the problem is runaway spending.  One can make the case that the tax law was fiscally imprudent, even if I disagree.  One cannot seriously compare the fiscal impact of tax reform to that of socialized healthcare, which would be 20 times larger.  I understand the rhetorical usefulness of saying, "the GOP didn't care about deficits related to X, so don't listen to them on deficits related to Y," but this sleight of hand only works if all other context is actively ignored.

(3) When Marsh frames the tax cuts as only benefiting a small slice of privileged Americans, I responded that they're actually benefitting nearly all taxpayers.  She flat-out rejected this correction, prompting me to call for a fact check.  The reality, according to multiple nonpartisan analyses, is that the overwhelming majority (80 percent overall and 91 percent among the middle class) of Americans receive tax cuts under the new law, across every income bracket.  As I've also written in recent months, Democrats shifted from pretending that the law was a tax hike on the middle class (relying on a deeply misleading, cherry-picked statistic that's been swatted down by fact-checkers), to complaining that its middle class tax cuts weren't permanent under the law.  Then they voted en masse against making the middle class tax cuts permanent.  

Only a small percentage (mid-single-digits) of taxpayers saw their tax burdens rise as a result of the law, the lopsided majority of whom are high-income earners living in high-tax blue states.  As another useful reminder, the vast majority of Americans do not itemize individual deductions, opting for the simpler and more appealing standard deduction.  The standard deduction is now doubled thanks to the GOP-passed law, which every Democrat in Congress opposed.  Starting this year, many taxpayers will notice the newly-simplified filing system, which will also reduce out-of-pocket costs while streamlining the process.

(4) As I concluded in our back-and-forth, anyone defending 'Medicare for All' as a viable program to uproot and replace the entire American healthcare system must be repeatedly asked whether they're comfortable ripping existing plans and arrangements away from at least 156 million people, whether they can guarantee wait times for care won't explode (as they have elsewhere), and how -- very specifically -- they plan to foot the $3.2 - $3.8 trillion bill every single year. I presented this challenge to Marsh, and she responded by asking where Trump's plan is. Despite my strong critiques of the president's recklessness on the long-term debt problem, I'll simply observe that Trump...is not proposing single-payer healthcare, and therefore does not need a plan to pay for it.