By now all Americans should realize that the Republican Party is never going to do anything that benefits anyone in this country who earns less than the top .01%. That said, the GOP never stops trying to spin its massive giveaways to the uber wealthy as somehow “helping out” Middle Class folks. Over the next two weeks we’ll be treated to the latest dose of this snake oil, the Republican Tax “Reform" Plan. And one of their loudest selling points for that Plan is going to be a flat-out lie.
In selling their soon-to-be-released tax plan, Republicans have been leaning hard on what they say is a provision to cut and simplify taxes for the middle class: Doubling the standard deduction that income tax payers may take.
"You have to look at the plan in its entirety. It doubles the standard deduction, so in the end, even the lowest rates get a tax cut," Rep. Jim Renacci, a Republican who sits on the tax-writing Ways and Means Committee, told Reuters.
The Talking Points have already been distributed to Republican Lawmakers on this, and much of the chronically math-challenged media types are gobbling them up. Google “double the standard deduction” today and you'll find a host of news outlets performing their usual stenographic function of parroting whatever right-wing garbage is fed to them.
Fortunately for us, however, someone has actually done the math—and examined the fine print of the Republican “plan,” such that it is. Turns out that folks who expect to “double their standard deduction” under the GOP proposal are in for a heck of a surprise:
[A] document published by Jonathan Swan of Axios shows this is badly misleading. The plan would increase the standardized deductions available to taxpayers by 15% or less.
Here’s the critical, buried fine print, deep in the proposal, for all you accountant types:
"To simplify the tax rules, the additional standard deduction and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction."
Oh, but as Josh Barro from Business Insider points out, that makes all the difference.
First of all, anyone who doesn't fall for the bait and still wants to itemize their deductions (that would be most mid to high-level earners) will get hammered, because part of the proposal eliminates (and I quote) “most" of those deductions. It’s not clear whether that will include the mortgage interest deduction (they say they’ll keep an “incentive” for mortgage interest, whatever that means), but it looks like state and local tax deductions, as one example, are on the chopping block.
Right now if you’re single, moderate income, with no dependents or a Senior, you get the personal exemption and the standard deduction combined anyway (Seniors get an additional deduction on top of that). So the Republican plan essentially changes nothing for these folks (15% increase for singles, and a whopping 3% for Seniors). But your tax rate will go up—that’s right, up—under the GOP plan, a soon as you hit your taxable income threshold, from 10% (now) to 12% So any gains you just got from that deduction/exemption scheme just evaporated.
But you're married? Good for you! Everything’s doubled under the GOP plan. But guess what? It’s already doubled under current tax law. If you have kids, another surprise awaits you—the GOP plan abolishes the exemption for kids. The Republicans say they’ll increase the Child Tax Credit at some point, but they don't say how much! So having more than one kid may not be a great idea, just sayin’. So much for “family values.”
Currently, you get to take the personal exemption even if you also itemize deductions, but you only get to take the standard deduction if you forego itemized deductions. Combining these provisions into a single, standard deduction would mean itemizers lose their personal exemption and get nothing back — meaning they'll typically pay tax on an extra $4,050 of income if they're single, or $8,100 if they're married.
So much for the “doubled standard deduction.” Like everything else that comes out of Republican mouths, it’s a lie. The entire purpose of the GOP proposal is to cut huge tax breaks for corporations and eliminate the estate tax, so that the ultra-rich can lord over the rest of us in perpetuity. The vast majority of Americans will get absolutely nothing—except reduced Social Security and Medicare coverage, and reduced services, because there simply won't be enough tax revenue to fully fund those programs.
And that’s the whole point.