Yesterday I was in a quandary: how, oh how, will Republicans manage to keep their tax bill from increasing the deficit in 2028 and beyond, as required by Senate rules? One possibility has always been to make the tax cuts temporary, like the Bush tax cuts, but that seemed like a nonstarter. After all, it makes no sense to enact temporary corporate tax cuts. Businesses need to plan ahead and they need to know what the tax landscape is going to look like.
But wait! The tax bill isn’t all corporate tax cuts. There are also personal tax cuts. Here’s what they look like if you disaggregate them:
Hmmm. What if you kill off the personal tax cuts in 2026? That cuts your deficit in half. Progress! But we need more. CBO estimates that eliminating Obamacare’s individual mandate would save some money, so let’s pencil that out:
Look at that! Now the total deficit in 2027 is only $37 billion. That’s totally manageable with a bit of creativity. Maybe some spending cuts on the poor would do the trick. Or a bit of fiddling with some of the details of the corporate rate cut. Or some chained-CPI inflation gimmickry.
So that’s where we are. Republicans plan to make the personal tax cuts temporary and to eliminate Obamacare’s individual mandate. This means the middle class goes from getting a pittance to getting nothing to getting actively screwed because their Obamacare premiums will go up. If Republicans are wondering why a large majority of Americans think their tax plan favors the rich at the expense of the middle class, this is why.
UPDATE: The labels on the top chart were switched when this was first posted. They are now correct.