Summary

In his first State of the Union address, President Joe Biden focused on Russia’s invasion of Ukraine, before turning to his accomplishments and agenda for the coming year. Some of his statements didn’t square with the facts.

• Biden said the planned release of 60 million barrels of global oil reserves, including 30 million from the U.S., “will help blunt gas prices here at home.” But energy experts said the emergency measures aren’t enough to have an impact.
• He said the economy added 369,000 manufacturing jobs last year, which is about right. But the manufacturing sector hasn’t recovered all the jobs lost during the pandemic, and manufacturing job growth (3.1%) is slower than overall job growth (4.6%).
• The president said “our economy created over 6.5 million new jobs just last year, more jobs in one year than ever before.” That’s true based on raw numbers, but not on a percentage basis. The claim also doesn’t acknowledge the unique economic conditions created by the COVID-19 pandemic.
• Biden prematurely claimed he’d be the first president to cut the annual deficit by $1 trillion in a single year. Even if it happens at the end of this fiscal year, the deficit would still be among the highest in history.
• Biden suggested that a soldier from Ohio developed lung cancer “from prolonged exposure to burn pits.” A scientific review by the National Academies, however, found there is not enough evidence to conclude such exposure is associated with cancer.
• He implied that the United States no longer invests almost 2% of its GDP in research and development, falling behind China. But recent Organization for Economic Cooperation and Development data show total U.S. R&D intensity was over 3% — higher than China’s 2.2%, though China may soon surpass the U.S.
• He said, “Now our infrastructure is ranked 13th in the world.” A 2019 report supports that, but some say the ranking underrates the U.S.
• Biden misleadingly said the tax cuts enacted in 2017 “benefited the top 1% of Americans.” Americans in every income category got tax cuts. It isn’t until 2027 when most of the individual income tax cuts in the law are set to expire that the top 1% sees the lion’s share of the tax benefits.
• The president wrongly called gun manufacturing “the only industry in America that can’t be sued.” Though gun manufacturers are protected from some civil lawsuits, there are exceptions. There are also other industries that are shielded from certain legal actions.

Biden spoke to Congress on March 1.

Analysis

Strategic Petroleum Reserve

In discussing Russia’s invasion of Ukraine and the impact on the global economy, Biden announced that dozens of countries had agreed to release 60 million barrels of oil from reserves — including 30 million barrels from the U.S. Strategic Petroleum Reserve.

“These steps will help blunt gas prices here at home,” Biden claimed. But oil prices continued to rise despite the announcement, and energy experts said the emergency measures aren’t enough to have an impact.

The BBC reported that Brent crude, the global benchmark for oil prices, reached $110 a barrel — the highest level in more than seven years, despite the announcement of the release of 60 million barrels of oil reserves. In a similar report on the continued surge in oil prices despite the planned release, the Wall Street Journal quoted Daniel Hynes, senior commodity strategist at ANZ in Sydney, as saying: “The sheer magnitude of the supply at risk of disruption means even a decent chunk of reserves being released may not make a dent.”

Likewise, S&P Global said in a blog post that the “announcement of the release of 60 million barrels of crude brought little comfort to oil markets, as it was largely in line with expectations and seen as insufficient to act as a counterweight to the disruption to Russian oil supplies.” Market strategist Yeap Jun Rong of IG in Singapore told S&P Global that the markets are “clearly disappointed with the size of the strategic reserves release.”

“[T]he 60 million barrels equivalent to just 4% of its overall emergency stockpiles and accounting for less than one day of worldwide oil consumption,” he said.

Manufacturing Jobs Boast

After ticking off a list of company announcements on new investments, the president boasted: “All told, 369,000 new manufacturing jobs are created in America last year alone.” That’s close to accurate, but lacks context.

Since Biden took office in January, the U.S. economy has added 375,000 manufacturing jobs, measuring from January 2021 to January 2022. Employment in manufacturing now stands at 12.6 million jobs. But that’s 226,000 fewer manufacturing jobs than the U.S. had in February 2020, so the sector has yet to return to pre-pandemic levels.

Also, the growth of manufacturing jobs has lagged the overall economy. The addition of 375,000 manufacturing jobs represents an increase of 3.1%, while the economy during that time added more than 6.6 million total jobs, a gain of 4.6%.

More on Jobs

Biden again boasted about record employment gains during his first year as president — without acknowledging that historical comparisons are skewed by the economic impact of the COVID-19 pandemic.

“In fact, our economy created over 6.5 million new jobs just last year, more jobs in one year than ever before in the history of the United States of America,” he said.

That’s true, but the record comes with some asterisks.

As we have noted before, the U.S. economy had lost nearly 22 million jobs at the beginning of the pandemic, in March and April 2020, when large parts of the economy shut down. By the time Biden took office, only about 57% of those jobs had come back, according to Bureau of Labor Statistics estimates. That meant there was still a lot of ground to make up.

And, despite the progress that has been made under Biden, total nonfarm employment in January was still about 2.9 million jobs below the pre-recession peak in February 2020.

It’s also worth noting that Biden presided over the largest one-year increase in raw numbers — but not on a percentage basis.

In Jimmy Carter’s first year as president in the late 1970s, employment went up by 4.8%, and it went up by 4.98% in Carter’s second year — higher than the 4.6% increase under Biden. There also were several years during the 1940s, ’50s and ’60s when jobs increased by larger percentages.

Comparing the percentage increase — rather than raw numbers — helps account for changes in the size of the labor force and the overall population over time.

Deficit Cutting

Biden said he would be the first president to cut the federal government’s annual deficit by $1 trillion.

Biden: By the end of this year, the deficit will be down to less than half of what it was before I took office. The only president ever to cut the deficit by more than $1 trillion in a single year.

That may turn out to be true — the current fiscal year is less than half over and a lot could still happen. But in historical context it would be less dramatic than it might sound.

The first time the entire annual deficit even reached $1 trillion was the fiscal year that ended Sept. 30, 2009. The pandemic pushed it to a record of over $3.1 trillion in the year ending Sept. 30, 2020, and in the most recent fiscal year it was still nearly $2.8 trillion.

During the first four months of the current fiscal year the deficit has declined dramatically. According to the nonpartisan Congressional Budget Office’s monthly budget review, the deficit was $259 billion during the period, or roughly one-third of what it had been in the comparable period a year earlier.

CBO said most of the reduction came from increased revenue, not from any penny-pinching by Biden. The economy surged faster than expected, and workers’ pay rose, producing more taxes being withheld.

Should trends continue, the deficit for the current fiscal year could easily be less than half the record $3.1 trillion reached the year before he took office, as Biden said. But it would still be among the half-dozen or so highest in history.

Burn Pits and Cancer

In the part of his address dedicated to veterans, Biden linked burn pits, or open air waste incineration sites that were common near U.S. military bases in Iraq and Afghanistan, to cancer. While more research is needed, it’s worth noting that scientists have not yet found a clear link between burn pits and cancer.

When troops come home after being “stationed at bases and breathing in toxic smoke from burn pits,” the president said, many service members are “never the same. Headaches. Numbness. Dizziness. A cancer that would put them in a flag-draped coffin.”

Biden went on to mention his son, Beau Biden, who served in Iraq and died from brain cancer in 2015, along with Sgt. 1st Class Heath Robinson, who was stationed in Baghdad and succumbed to lung cancer.

“[C]ancer from prolonged exposure to burn pits ravaged Heath’s lungs and body,” Biden said.

The president was careful to say that it’s not known whether burn pits caused his son’s cancer, but he was less circumspect in describing Robinson’s case.

The National Academies of Science, Engineering, and Medicine has reviewed the scientific evidence and, in two reports, has concluded that there isn’t enough evidence to show a connection between burn pits or other airborne hazards encountered by such service members and cancer. 

As we’ve written, when Biden previously claimed that “more people are coming home from Iraq with brain cancer … than any other war,” a 2011 report by the Academy on the long-term health effects of burn pit exposure in Iraq and Afghanistan found that there was “inadequate/insufficient evidence” to determine whether there is an association with cancer.

Another report in 2020 similarly found “inadequate or insufficient evidence of an association between airborne hazards exposures in the Southwest Asia theater and the subsequent development of respiratory cancers.”

It’s important to note that the reports do not mean that burn pits haven’t caused cancers — and we don’t have any specific knowledge of Robinson’s case. But it’s also true that researchers do not have much evidence that burn pits have caused cancers, as one might assume when hearing Biden’s description.

In his address, Biden announced that the Department of Veterans Affairs plans to propose adding certain rare cancers to the presumed service-connected list as related to military environmental exposure. The list doesn’t include brain cancer, but does list several cancers of the lung, among others.

According to the VA press release, the department said that “through a focused review of scientific and medical evidence there is biologic plausibility between airborne hazards, specifically particulate matter, and carcinogenesis of the respiratory tract, and that the unique circumstances of these rare cancers warrant a presumption of service connection.”

“The rarity and severity of these illnesses, and the reality that these conditions present a situation where it may not be possible to develop additional evidence prompted us to take this critical action,” VA Secretary Denis McDonough added in the release.

Research and Development

Diverging from his prepared remarks, Biden misled on the proportion of the United States’ gross domestic product invested in research and development.

“But folks, to compete for the jobs of the future, we also need to level the playing field with China and other competitors,” Biden said. “We used to invest almost 2% of our GDP in research and development. We don’t now … China is.”

Biden made similar claims last spring while advocating the passage of the American Jobs Plan, aspects of which were later incorporated into the Infrastructure Investment and Jobs Act that passed in November.

Biden was likely referring to federal research funding, which has fallen below 2%, according to an analysis of federal R&D funding by Information Technology and Innovation Foundation. 

But as we reported last May, the United States’ total R&D funding — which includes private business and nonprofits — was over 3% in 2019 (the last year for which data from the Organization for Economic Cooperation and Development was available for both countries). 

“In the United States, R&D intensity surpassed the 3% milestone for the first time, while the R&D intensity of China grew from 2.1% to 2.2%,” the OECD said in a March 2021 report. (“R&D intensity” is another term for domestic expenditure on R&D as a percentage of GDP.)

Experts we consulted told us that China has been heavily investing in research and development and may soon surpass the U.S. — but it hasn’t done so just yet.

“As far as I can assess there is no way you can say that China is ahead of the U.S. in R&D,” Robert D. Atkinson, president of the Information Technology and Innovation Foundation, told us last year.

Atkinson cowrote a 2019 analysis of federal funding for research and development that said the U.S. government invests about $125 billion per year in R&D. In 2017, the U.S. federal government invested about $26 billion more than the Chinese government in “absolute and purchasing power parity terms (controlling for each nation’s cost of living),” the report said.

13th in Infrastructure

In talking about the bipartisan infrastructure law, Biden said, “America used to have the best roads, bridges, and airports on Earth. Now our infrastructure is ranked 13th in the world.”

His claim is based on a 2019 Global Competitiveness Report by the World Economic Forum, in which the U.S. overall ranked second among 141 economies, but 13th when looking at infrastructure.

But some say the report underrates the U.S. on infrastructure. As the Washington Post’s Charles Lane stated, the countries listed ahead of the U.S. are smaller and therefore have less infrastructure challenges. The list is topped by Singapore, followed by the Netherlands, Hong Kong, Switzerland, Japan, South Korea, Spain, Germany, France, Austria, United Kingdom, and United Arab Emirates. The six continental countries in Europe should also count as a unit, he argued. This adjustment, Lane said, “puts the United States in the top five.”

And when considering the largest countries in the world, both geographically and in terms of population, the U.S. comes first in terms of infrastructure in the list. China, for example, ranked 36th, Canada 26th, India 70th and the Russian Federation 50th.

Although U.S. infrastructure ranked 9th in the 2018 report and higher in previous years, the 13th place is an improvement when compared with the 2011-12 report that ranked U.S. infrastructure in 24th place out of 142 economies.

On Trump Tax Cuts

As he often does, Biden cherry-picked from the 2017 tax cuts backed by then-President Donald Trump to claim that the law “benefited the top 1% of Americans.”

Biden: Unlike the $2 trillion tax cut passed in the previous administration that benefited the top 1% of Americans, the American Rescue Plan helped working people — and left no one behind.

Americans in every income category saw tax cuts from the Tax Cuts and Jobs Act in the immediate years after the law passed in 2017. Biden and other Democrats regularly focus on the latter years of the legislation, when the balance of tax cuts shift to the wealthiest Americans. As we have written, in order for the legislation to be passed via reconciliation, most of the individual income tax provisions are set to expire by 2027, while the corporate tax cuts would remain, making the tax benefit distribution more lopsided for the top 1% than in earlier years.

So, while the top 1% got 20.5% of the total tax benefits in 2018, and 25.3% of the tax benefits in 2025, the share of the total tax savings that accrues to the top 1% in 2027 is 82.8%, according to an analysis by the Tax Policy Center.

Republicans say they expect a future Congress will extend the individual tax cuts, rather than allowing taxes for many to increase, but that will be up to a future Congress to decide.

Biden went on to say that while Republicans have long promised that the benefits of tax cuts for “those at the top” would “trickle down,” they instead led to “lower wages.”

We can’t say what the impact of the Trump-championed tax cuts may have been on wages, but as we wrote in October for our story “Trump’s Final Numbers,” the average weekly earnings of all private-sector workers, in “real” (inflation-adjusted) terms, rose 8.7% in Trump’s four years. Wages for rank-and-file production and nonsupervisory workers — who make up 81% of all private-sector workers — went up 9.8% under Trump.

Gun Manufacturers and Liability

Biden repeated a false claim about gun manufacturers that he has made several times in the past.

The president called on Congress to “repeal the liability shield that makes gun manufacturers the only industry in America that can’t be sued.”

Gun makers are protected from some, but not all, civil lawsuits under federal law. Other industries, such as vaccine manufacturers and administrators, also receive certain liability protections.

As we have previously reported, the Protection of Lawful Commerce in Arms Act does largely prevent licensed manufacturers, dealers, sellers of firearms or ammunition, and trade associations from being sued over the misuse of guns or ammunition.

But the 2005 law outlines six exceptions through which civil lawsuits can be brought against firearm manufacturers. These exceptions include cases in which there was negligence on behalf of the firearm seller, a firearm was transferred with the knowledge that it would be used to commit a crime, and manufacturers and sellers violated state or federal law when marketing or selling a firearm.

Sources

Press release. “Announcement Follows Commitment from IEA Member Countries to Collective Release of 60 Million Barrels from Strategic Petroleum Reserves.” Department of Energy. 2 Mar 2022.

“Ukraine conflict: Oil hits $110 a barrel despite emergency measures.” BBC. 1 Mar 2022.

Webb, Quentin and Dave Sebastian. “Oil Tops $110 as Russia Struggles to Maintain Energy Sales.” Wall Street Journal. 1 Mar 2022.

Wells, Wendy. “Crude rallies as strategic petroleum reserve release underwhelms market.” S&P Global Community Insights. 2 Mar 2022.

U.S. Bureau of Labor Statistics. Employment, Hours, and Earnings from the Current Employment Statistics survey (National): Manufacturing. Accessed 1 Mar 2022.

U.S. Bureau of Labor Statistics. Employment, Hours, and Earnings from the Current Employment Statistics survey (National): All employees, thousands, total nonfarm, seasonally adjusted. Accessed 1 Mar 2022. 

BeMiller, Haley. “‘Heath was a fighter to the very end’: Biden honors Ohio veteran during State of the Union.” The Columbus Dispatch. 1 Mar 2022.

McDonald, Jessica. “Biden Exaggerates Science on Burn Pits and Brain Cancer.” FactCheck.org. 18 Dec 2019.

National Academies of Sciences, Engineering, and Medicine. “Respiratory Health Effects of Airborne Hazards Exposures in the Southwest Asia Theater of Military Operations.” Sept 2020.

“VA will propose adding rare cancers to the presumed service-connected list as related to military environmental exposure.” Press release. U.S. Department of Veterans Affairs. 1 Mar 2022.

Gore, D’Angelo. “FactChecking Biden’s First Press Conference.” FactCheck.org. 25 Mar 2021.

Robertson, Lori. “Democrats’ Misleading Tax Line.” FactCheck.org. 26 Jan 2018.

Tax Policy Center. “Distributional Analysis of the Conference Agreement for the Tax Cuts and Jobs Act.” 18 Dec 2017.

Stein, Jeff. “Republicans explain why their tax cuts are temporary, but not really temporary.” Washington Post. 30 Nov 2017.

Keily, Eugene. “Trump’s Final Numbers.” FactCheck.org. 8 Oct 2021.

Bureau of Labor Statistics. “Average weekly earnings of all employees, 1982-1984 dollars, total private, seasonally adjusted.” Accessed 1 Mar 2022.

Bureau of Labor Statistics. “Average weekly earnings of production and nonsupervisory employees, 1982-84 dollars, total private, seasonally adjusted.” Accessed 1 Mar 2022.

Bureau of Labor Statistics. “Production and nonsupervisory employees, thousands, total private, seasonally adjusted.” Accessed 2 Mar 2022.

White House website. “Remarks by President Biden on a Future Made in America.” 18 May 2021.

White House website. “Remarks by President Biden on the American Jobs Plan.” 31 Mar 2021.

White House website. “FACT SHEET: The American Jobs Plan.” 31 Mar 2021.

Kiely, Eugene. “China Closes Gap with U.S. on R&D Investments, But Hasn’t Caught Up.” FactCheck.org. 25 May 2021.

Organization for Economic Cooperation and Development. “OECD Main Science and Technology Indicators.” March 2021.

Foote, Caleb and Atkinson, Robert. “Federal Support for R&D Continues Its Ignominious Slide.” Information Technology and Innovation Foundation.” 12 Aug 2019.

Lane, Charles. “Opinion: No, America’s infrastructure is not ‘crumbling’.” Washington Post. 6 Apr 2021.

Schwab, Klaus. The Global Competitiveness Report 2019. World Economic Forum. 2019.

Schwab, Klaus. The Global Competitiveness Report 2018. World Economic Forum. 2018.

Schwab, Klaus. The Global Competitiveness Report 2011-12. World Economic Forum. 2011.

White House Office of Management and Budget, “Historical Tables” Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits (-): 1789–2026. 28 May 2021.

U.S. Department of the Treasury. “Monthly Treasury Statement.” Jan 2022.

Congressional Budget Office. “Monthly Budget Review.” 8 Feb 2022.

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Former Vice President Joe Biden wrongly says “most of the conservative think tanks,” including the Heritage Foundation, agree that the tax cuts championed by President Donald Trump “generated virtually no growth at all.”

There are many economists who might agree with Biden, the presumptive Democratic presidential nominee, that the tax cuts have not generated much, if any, economic growth, but most conservative think tanks, including the Heritage Foundation, are not among them.

The Tax Cuts and Jobs Act, passed by Congress and signed by Trump in December 2017, was billed by Republicans as a catalyst to accelerate economic growth and in turn, to create more jobs and higher wages. The law lowered many individual tax rates, nearly doubled the standard deduction, eliminated personal exemptions and increased child tax credits, among other changes. It also cut the top corporate tax rate from 35% to 21%. It is expected to add $1 trillion to $2 trillion to the federal debt over 10 years.

In an open letter to Congress in November 2017, more than 100 economists in support of the tax cuts predicted the tax cuts would “ignite our economy with levels of growth not seen in generations.”

A Congressional Research Service review of the first-year impact of the law, however, did not find evidence of “large effects particularly in the short run.”

CRS, May 22, 2019: In 2018, gross domestic product (GDP) grew at 2.9%, about the Congressional Budget Office’s (CBO’s) projected rate published in 2017 before the tax cut. On the whole, the growth effects tend to show a relatively small (if any) first-year effect on the economy. Although growth rates cannot indicate the tax cut’s effects on GDP, they tend to rule out very large effects particularly in the short run. Although investment grew significantly, the growth patterns for different types of assets do not appear to be consistent with the direction and size of the supply-side incentive effects one would expect from the tax changes. This potential outcome may raise questions about how much longer-run growth will result from the tax revision.

Last week, Biden seized on the GDP growth figures highlighted in the CRS report to argue that the TCJA has “generated virtually no growth at all.” And, Biden added, that is according to conservative think tanks, including the Heritage Foundation.

“Imagine if we had that $2 trillion tax cut and we hadn’t wasted it on the wealthy, that generated virtually no growth at all,” Biden said on “The Daily Show with Trevor Noah” on June 10. “No growth at all, according to most of the conservative think tanks.”

“And imagine if we had that $2 trillion tax cut that he promoted and got passed for the wealthy, even places like the Heritage Foundation said that didn’t grow the economy. $2 trillion,” Biden said on June 11 during a roundtable meeting in Philadelphia on opening the economy. “Imagine if we had it right now, to focus on the things that can build a new economy, invest in everything from teleconference, into providing for the kind of health.”

What Economists Say

We reached out to the Biden campaign for backup, and it passed along the nonpartisan CRS report, which as we said, concluded that “the growth effects tend to show a relatively small (if any) first-year effect on the economy.”

Biden’s campaign also pointed to a May 29, 2019, article from Howard Gleckman, a senior fellow in the Urban-Brookings Tax Policy Center, who wrote that the CRS report findings were consistent with the Tax Policy Center prediction in December 2017 that the “short-term macroeconomic effects” would be “extremely modest.”

“In fairness, the tax cuts didn’t occur in a vacuum,” Gleckman wrote in that same article. “Some of their benefits may have been offset by President Trump’s own highly restrictive trade policy, or magnified by new deficit spending approved by Congress in 2018.”

In his latest update about the economic impact of the TCJA, published on Feb. 5, Gleckman concluded after looking at two years of data: “Despite the Trump Administration’s rosy promises that the post-TCJA economy would boom, it has instead grown on many dimensions at roughly the same steady, unspectacular pace as it did prior to passage of the tax law.”

“Our forecast at the time the TCJA became law was for a modest short-term bump in economic output (mostly from people spending their tax cuts) followed by a gradual return to pre-TCJA trend,” Gleckman told us via email. “That is pretty much what happened. … Business investment fell after passage. Employment pretty much tracked pre-TCJA trends. GDP growth had its bump, then returned to trend.”

“Remember too that the growth story the White House told was this: The TCJA would encourage more capital investment that would lead to more productivity and, eventually, to higher wages,” Gleckman said. “The reality was: We never even got the first step, except for a brief period just before and after passage of the law.”

Gleckman acknowledged, however, that it is “impossible to pull apart tax policy from other issues, including Trump’s trade policy in 2018 and 2019.” It is possible, he said, that the “TCJA contributed to more growth but that benefit was offset by the tariffs (which are a tax increase on US consumers and businesses). Or not.”

“The disruptions of 2020 mean we never will know the long-term effects of the TCJA,” Gleckman said. “But based on what we saw in 2018 and 2019, there is no evidence that the TCJA contributed very much to economic growth.”

Those analyses — from CRS and the Tax Policy Center, which is not a conservative group — provide some ammunition for Biden’s claim that the TCJA “generated virtually no growth at all.” That’s his assessment, and some economists agree.

But Biden is wrong to claim that “most of the conservative think tanks” agree.

Biden’s campaign cited three articles that it says came from conservative institutions: two from the American Enterprise Institute and one from the Tax Foundation. None of them support Biden’s claim, though.

The article from Nicole Kaeding, then at the Tax Foundation, was titled “The Tax Cuts and Jobs Act After A Year” and was published on Dec. 17, 2018.

Kaeding wrote that one year after the law’s passage there was “very little” evidence “we point to on how the Act has impacted the U.S economy.” But Kaeding also wrote that “the law’s design is such that the economic impacts are long-run. It takes several years for the lower cost of capital to impact investment. Firms need time to plan, purchase, and permit new investments before they put the items into service. As we noted in our original score, much of the acceleration of growth happens several years after the law’s original passage, before fading as provisions in the law expire.”

Garrett Watson, a senior policy analyst at the Tax Foundation, said Biden is distorting the Tax Foundation’s position.

“Our position is not that the TCJA ‘has generated no growth at all,’ but rather that identifying the specific impact the TCJA had on growth is challenging given the many other factors at play that drive business investment and economic growth,” Watson told us via email. “This includes the economic headwinds produced by the escalating trade war in 2019 and the coronavirus pandemic today. This is in addition to the fact that it may take several years to isolate the impact of a tax change, as Nicole pointed out in her piece. We provided feedback on a Congressional Research Service (CRS) report on TCJA last year, for example, arguing that ‘its conclusion that the TCJA has produced little to no increase in output (GDP) and its argument that investment has not increased as was expected…are too strong given the evidence.’”

The first article from the American Enterprise Institute cited by the Biden campaign was one written by Alan Viard, a resident scholar at AEI. Although Viard wrote that “a sharp uptick in investment has not occurred,” he did not conclude that the TCJA has generated no growth.

Rather, Viard posed three possibilities, only one of which considers the possibility that “the corporate tax cut is not boosting investment.” It is also possible, he wrote, that “the boost is taking longer than expected” or that “the tax cut boosted investment relative to what it would otherwise have been, even as other factors (perhaps other TCJA provisions or the trade war) have offset the boost.”

“It would be very surprising it if didn’t generate any growth at all,” Viard told us in a phone interview, adding that as a general economic principle, the corporate tax cuts should increase investment in the U.S.

Viard said that while “the growth impact may be smaller than many of us [conservative economists] thought,” it is “impossible to know” whether the law’s effects are simply taking longer than expected, or if the growth it generated has been offset by other factors, such as the trade war.

The third article cited by the Biden campaign is a blog post written for AEI by Jason Furman. But Furman is not affiliated with AEI. Furman, an economics professor at Harvard and a nonresident senior fellow at the Peterson Institute for International Economics, served eight years as a top economic adviser to President Barack Obama. According to Viard, Furman was simply invited to participate in a blog symposium about the effects of the TCJA. The symposium sought to include input from economists across the ideological spectrum.

Wrong on Heritage Foundation

As for Biden’s specific claim that “even places like the Heritage Foundation said that [TCJA] didn’t grow the economy,” the Biden campaign did not get back to us with backup for that.

But the Heritage Foundation, a conservative think tank, says that’s false.

On Twitter, Adam Michel, a senior policy analyst who focuses on tax policy for the Heritage Foundation, pointed to his Dec. 12 commentary “How 2 Years of Tax Cuts Have Supported Our Strong Economy.”

When Biden said something similar last August, Michel tweeted, “I think I’ve written something basically every week for the last year+ that says the tax cuts are working.”

In a series of tweets, Jessica Anderson, executive director of Heritage Action, the lobbying arm of Heritage, also took issue with Biden’s comments, saying, “The country saw increased wage growth, business investment, and employment thanks to the law.”

In a Nov. 4 post, the Peter G. Peterson Foundation looked at what economists from various viewpoints were saying about the TCJA nearly two years after its implementation. One of its conclusions: “Economists do not agree on the economic effects of the TCJA.” Additionally, it concludes, “economists generally agree that while certain definitive trends are emerging, it is impossible to undertake a full accounting of the TCJA’s effects until more time has passed.”

“A full analysis of the effects of the TCJA will not be possible to complete for years to come, if ever,” the Peterson report states.

Biden is, of course, entitled to his opinion about the effect of the TCJA. And he has numerous economists he could cite who agree the tax cuts have, to date, resulted in very little economic growth. But he is wrong when he says that “most of the conservative think tanks” in general, and the Heritage Foundation in particular, agree that the tax cuts resulted in “virtually no growth.” In fact, they do not agree.

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In this video, we examine some of the false and misleading claims from the July 30 Democratic debate.

• Former Rep. Beto O’Rourke of Texas falsely said that “no other country comes even close to” the 40,000 gun-violence deaths in the United States. That’s the correct figure for the U.S. for 2017, but Brazil had more firearm injury deaths than the U.S. in 2016, according to a 2018 study published in JAMA. And several countries have higher firearm death rates.
• Sen. Amy Klobuchar of Minnesota wrongly said the Republican tax cut law “left everyone behind” except President Donald Trump’s “Mar-a-Lago friends.” The law benefited the wealthy, but the Urban-Brookings Tax Policy Center found it would reduce taxes on average for all income groups in 2018.
• Rep. Tim Ryan of Ohio falsely claimed farmers “haven’t made a profit in five years.” Farm profits haven’t fallen below $60 billion a year in more than a decade.
• “Tonight in America, as we speak, 87 million Americans are uninsured or underinsured,” said Sen. Bernie Sanders of Vermont. That figure, however, includes 19.3 million who were insured when surveyed but had a gap in coverage in the prior year.
• Former Colorado Gov. John Hickenlooper asked, “Where’s the small manufacturing jobs that are supposed to come back?” Under Trump, the economy has added nearly 500,000 manufacturing jobs.

For a complete analysis of these and other claims, see our story “FactChecking the Second Democratic Debate.”

The post Video: FactChecking the Democratic Debate appeared first on FactCheck.org.

In this fact-checking video, CNN’s Jake Tapper examines false and misleading claims made on the Sunday political talk shows by Larry Kudlow, the chief economic adviser to the president, about the Tax Cuts and Jobs Act. 

Kudlow said on CBS’ “Face the Nation” that Congressional Budget Office numbers show the “entire $1.5 trillion tax cut is virtually paid for by higher revenues and better nominal GDP.” But that’s not the case, experts told us.

The CBO projected in April that the tax law, factoring in all economic effects, would still add nearly $1.9 trillion to the total deficit between 2018 and 2028. 

The CBO does estimate that the tax law will prompt some economic changes, including a boost in the average annual real GDP. But the overall macroeconomic feedback from the law isn’t enough to cover the cost.

“CBO is certainly not projecting that the tax cuts will pay for themselves,” Aparna Mathur, a resident scholar in economic policy studies at the American Enterprise Institute, told FactCheck.org in an email.

On CNN’s “State of the Union,” Kudlow told Tapper that “even the CBO, they’re suggesting we have already paid for two-thirds of the corporate tax cut.” 

Mark Mazur, director of the Tax Policy Center, told CNN that he had “no idea” where Kudlow got those numbers. He added: “It’s possible that he is taking the effects of all the economic revisions in CBO’s April projections, many of which did not stem from the TCJA, and saying the budgetary effect of all those changes outweighs the cost of the corporate and business provisions of the bill.”

The White House did not respond to our request for an explanation of Kudlow’s claims.

FactCheck.org and CNN’s “State of the Union” have been collaborating on fact-checking videos since September 2015. This video is based on our story “CBO Didn’t Say Tax Cuts Were ‘Virtually Paid For.’”

All of the fact-checking videos can be found on FactCheck.org. 

The post Video: Tax Cut Claims appeared first on FactCheck.org.

Summary 

In a preview of this fall’s midterm elections, Democrats and Republicans are airing TV ads in Pennsylvania’s special House election and in swing congressional districts across the country that stretch the facts about the impact of the new tax law:

• Ads from two Democratic groups repeat the misleading party line that 83 percent of the Republican tax cuts go to the wealthiest 1 percent. That’s not the case until 2027 and only after most of the individual income tax changes have expired.
• Democratic ads in Pennsylvania’s 18th District and other races say Republicans will now “cut Medicare and Social Security.” While some lawmakers have talked about reducing the growth of those programs to lower deficits, there’s no plan being debated now, and GOP leaders say they don’t think it will be on the agenda this year.
• A Republican group is airing a TV ad in 24 congressional districts that touts a “$2,000 middle class tax cut.” That’s an estimate for a family of four with two young children and an income of $73,000. The tax cut would be nearly half that for a family of four with older teenagers. Both tax cuts would shrink over time as other provisions of the law take effect or expire.
• Another Republican super PAC is airing ads in Pennsylvania’s 18th Congressional District that say the district’s “middle class” will save $2,900. That’s based on a family of four with two young children and a household income of $100,920 — which is higher than the median family income in that district.

Analysis

The Democratic Line: Nationwide

The Tax Cuts and Jobs Act — a Republican-crafted tax bill that President Donald Trump signed into law on Dec. 22 — is emerging as one of the major issues of the 2018 midterm congressional elections. Both parties are using the tax law to attack each other, and they’re stretching the facts in the process.

Ads attacking Republicans in three states use the misleading Democratic talking point that 83 percent of the tax cuts go to the wealthiest 1 percent. As we’ve written before, that’s true for 2027 but only because most of the individual income tax changes are set to expire by then.

In 2025, a quarter of the tax cuts go to the top 1 percent.

Republicans wrote the legislation with sunsetting tax cuts to meet Senate rules that enabled them to pass the bill with a simply majority (and no Democratic votes). They expect a future Congress to extend the individual income tax cuts, they say.

The Senate Majority PAC, a Democratic group, is making the claim in ads airing in Indiana, where Democratic Sen. Joe Donnelly is running for reelection, and Missouri, where Sen. Claire McCaskill could face the state’s attorney general, Josh Hawley, who’s named in the ad.

In Iowa, the liberal group Not One Penny is using this talking point in ads in the 1st and 3rd Districts, now represented by Republican lawmakers Rod Blum and David Young, respectively.

The claim that 83 percent of the tax cuts go the top 1 percent has been used repeatedly by Democratic leaders in Congress. We’ve written before that one might argue Republicans basically wrote this talking point for the Democrats by structuring the legislation with sunsetting individual tax cuts. But the claim still leaves a misleading impression that the law is more lopsided than it actually is. 

In 2018, one-fifth of the tax cut benefits goes to the top 1 percent of income earners, according to an analysis by the Tax Policy Center. In 2025, a quarter goes to the top 1 percent — a sizable percentage but far below the 83 percent figure. Those wealthy taxpayers in 2025 would earn more than $837,800 and get an average tax cut of $61,090, the TPC says.

Senate Majority PAC sent us support for the ad, which includes a Dec. 18 Vox article that notes: “[E]ven in the first years of the bill’s implementation, when it’s an across-the-board tax cut, the benefits of the law would be heavily concentrated among the upper-middle and upper-class Americans, with nearly two-thirds of the benefit going to the richest fifth of Americans in 2018.” That’s correct, per the TPC analysis, and it’s still the case in 2025. 

But Democrats instead have focused on the most lopsided figures for 2027, when the percentage of benefits going to the top 1 percent more than triples to 82.8 percent, “because almost all individual income tax provisions would sunset after 2025,” says the TPC. The corporate tax cuts remain in effect, including the drop in the top corporate rate from 35 percent to 21 percent, and wealthy individuals still get some benefits from those remaining cuts.

Republicans included sunsetting individual income tax cuts in their bill so they could pass it through budget reconciliation, which requires only a majority vote in the Senate. Under reconciliation, lawmakers couldn’t add more than $1.5 trillion to the deficit over 10 years, or add to the deficit beyond those 10 years.

GOP lawmakers say they expect a future Congress to extend those cuts.

Not One Penny is running another ad in Iowa’s 1st and 3rd Districts that claims: “For people who have to work for a living, Rod Blum’s [or David Young’s] vote raises taxes on the majority of Americans.” The ad shows a CNBC headline that reads, “GOP plan will ultimately raise taxes on 50% of Americans, nonpartisan assessment says.”

But that again pertains to the year 2027, “largely because the legislation’s personal tax cuts expire in 2026,” as the Associated Press story on CNBC’s website says. Before that year, the vast majority of Americans get a tax cut under the law.

In 2018, 80.4 percent of all taxpayers get a tax cut, and in 2025, 75.5 percent get a tax cut, according to the Tax Policy Center analysis.

It’s worth noting that the average tax hike on 50 percent of Americans in 2027 isn’t particularly large. In the middle fifth of taxpayers, those earning between $54,700 and $93,200, 70 percent would see a tax increase that year, compared with what they would have paid in the absence of the new tax legislation. That group would pay an average of $150 in higher taxes.

The Democratic Line: Pennsylvania

In Pennsylvania’s 18th Congressional District, Conor Lamb, a former federal prosecutor, and Rick Saccone, a Republican state legislator, face off in a March 13 special election for a seat vacated by former Rep. Tim Murphy, who resigned in October after it was reported that he encouraged a woman with whom he had an extramarital affair to get an abortion. 

The race has given both parties a chance to test run their attack lines on the Tax Cuts and Jobs Act.

In an ad called “Wiped Out,” Lamb’s campaign says the GOP tax plan will increase the deficit by $1.5 trillion. That’s correct. The tax bill is expected to increase the deficit by $1.46 trillion over 10 years, according to the nonpartisan Joint Committee on Taxation.

The ad goes on to say that the Republicans’ “next step is to cut Medicare and Social Security.” The Senate Majority ads in the Missouri and Indiana Senate races also make this claim. The Missouri ad says that “to pay for the tax giveaway, there’s a plan to cut Medicare for seniors,” showing an elderly woman looking concerned.

But there’s no “plan” being debated in Congress, and GOP leaders say they don’t think lawmakers will address these issues in 2018. Lawmakers have talked about the need to cut the growth of spending in these programs in order to reduce deficits, and reducing Medicare spending was part of the president’s budget proposal. 

It’s not unusual to hear politicians of both parties talk about reducing the growth of Medicare in particular, as we’ve explained before. The nonpartisan Congressional Budget Office estimated last year that deficits will continue to rise over the next three decades, “because spending growth is projected to outpace growth in revenues.” Charts on the spending growth show that Social Security and major health care programs make up about half of that spending growth. “In particular, spending as a share of GDP increases for Social Security, the major health care programs (primarily Medicare), and interest on the government’s debt,” the CBO said, citing the aging of the population for much of the growth in Social Security and Medicare.

The Tax Cuts and Jobs Act is expected to exacerbate the problem. The Hill wrote in a Dec. 3 story: “The projected increase in the debt from the tax package could make the situation worse, budget experts say.” William Hoagland, senior vice president at the Bipartisan Policy Center, told the newspaper that “[i]f we are talking about the kinds of deficits” that are projected from the tax bill, “entitlement cuts are definitely on the table.”

Republicans have said that the tax cuts will produce significant economic growth, and therefore revenue. But even taking into consideration macroeconomic effects, the Joint Committee on Taxation estimates the tax cuts would add $1.1 trillion to the deficit over 10 years.

The story cited in the Senate Majority ads is a December article in U.S. News and World Report and is based on Democrats expressing concern with some remarks made by House Speaker Paul Ryan and Florida Sen. Marco Rubio. 

“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said on Dec. 6 on The Ross Kaminsky Show on talk radio, adding that “it’s the health care entitlements that are the big drivers of our debt.” 

But by January, Ryan said he didn’t think the House would address Medicare changes (or Social Security) this year, adding that he wants a “bipartisan consensus” on those issues.

The Lamb ad points to a Newsweek article from Dec. 1, on Rubio’s comments. He spoke generally about making changes in Medicare and Social Security for “future beneficiaries” to reduce the growth of the debt and deficits.

Here’s the fuller quote from Rubio, made in an interview with Politico when he was asked about concerns that the GOP tax plan would increase the deficit. The part in bold appeared in the Newsweek story:

Rubio, Nov. 29, 2017, Politico interview (starting at the 21:46 mark): The argument would be we can’t cut taxes because it will drive up the deficit. That assumes that somehow we can fix the deficit through higher taxes, and we can’t. The only way you’re going to deal with the debt is you have to do two things. … You have got to, you have got to generate economic growth, because growth generates revenue. But you also have to bring spending under control. And not discretionary spending. That isn’t the driver of our debt. The driver of our debt is the structure of Social Security and Medicare for future beneficiaries.

We still have time not just to save those programs but to responsibly structure them in a way that doesn’t impact current retirees or people about to retire, but in a way that would probably impact it for me and people younger than me — in ways that quite frankly you wouldn’t really notice and you wouldn’t really object to, because it’s reasonable. And if we did that in combination with growth, you can begin to bring the trajectory of the debt to a responsible and acceptable level. That is the only way forward.

The Florida senator’s remarks make clear he wasn’t talking about a concrete plan to cut Medicare and Social Security, but rather his thoughts in general on reducing the debt.

After that interview, in late December, Senate Majority Leader Mitch McConnell said changes to Medicare and Medicaid were off the table for 2018. “I think Democrats are not going to be interested in entitlement reform, so I would not expect to see that on the agenda,” he said, according to the Washington Post. “What the Democrats are willing to do is important, because in the Senate, with rare exceptions like the tax bill, we have to have Democratic involvement.”

The Post story noted that “Democrats are already warning Republicans against attempting to force any reductions to entitlement spending, making it almost certain that if the GOP goes ahead with such changes, they will be doing so without any Democratic support — and exposing themselves to attacks on the campaign trail.”

But they’re being attacked on this point anyway, despite not moving ahead with such spending cuts.

In its support for the ads, Senate Majority also points to the president’s proposed budget for fiscal 2019. It would reduce Medicare spending by $236 billion over 10 years, Reuters reported. But the news service noted: “There is little chance of those cuts becoming real, as presidential budgets are rarely enacted by the U.S. Congress, which controls federal purse strings.” 

The Associated Press reported that Trump’s proposed changes to Medicare’s prescription drug program would “create winners and losers,” with some seniors saving money and others paying more.

We don’t know whether Congress will move forward on such a prescription drug plan. McConnell has said he doesn’t expect Medicare to be on the Senate’s agenda this year.

So, there’s no “plan” to cut Medicare, or Social Security, as these campaign ads claim. Nor have Republicans said they’d “pay” for their tax cut with such spending reductions. But the Democrats have a point that Republican lawmakers have discussed the need to reduce spending on those programs to lower long-term deficits — deficits that the tax cuts are expected to boost.

The Republican Line: Nationwide

Republican groups have been proactive in promoting the benefits of the new tax law — not only in Pennsylvania’s special election but across the country, mostly in competitive districts.

American Action Network, a Republican political group organized as a 501(c)(4) nonprofit, announced on March 5 that it would spend $1 million on a TV ad campaign in 24 House districts in 16 states.

The ad features Natalie Mihalek, a young mother of three small children, who thanks Congress for passing the tax bill, which she says increased her take-home pay because her employer is now withholding less in federal income tax. (Mihalek is a Republican who ran for the Pennsylvania Senate in 2015 and lost.) On the screen, the ad displays these words: “$2,000 middle class tax cut.”

The ad offers no source for the $2,000 claim, but it is a familiar Republican talking point developed by the Republican staff of the tax-writing House Ways and Means Committee. The GOP staff estimates that “the typical family of four earning the median family income of $73,000” will save $2,059.

House Speaker Paul Ryan frequently cites the $2,059 figure, which is displayed prominently on his website. Trump cited the figure in remarks on March 7 to a Latino business group.

The estimate is accurate, but only for certain families – specifically those that have younger children and do not itemize their deductions. And even for that family, the tax savings will dwindle over time.

The nonpartisan Tax Policy Center released a report on Dec. 22 that looked at how “representative families” would fare under the new law. Two of those families had adjusted gross incomes of $75,000 – which is close to the “typical family” that Republicans say will save $2,059.

The Tax Policy Center calculated that a family of four with two young children (younger than 17 years old) and an adjusted gross income of $75,000 would see a tax savings of $2,119 in 2018. But the savings would be nearly half that ($1,119) for a couple earning the same amount ($75,000) but with two older children (17 and 18 years old). That’s because of changes to the child tax credit and elimination of the personal exemptions.

As we explain in our guide to the tax changes, the new law increases the standard deduction from $12,700 to $24,000 for a married couple filing jointly. It also doubles the child tax credit from $1,000 to $2,000. But the new law eliminates the personal exemption, which is $4,050 per person.

The couple with the younger children would benefit from the increased child tax credit. But that tax credit is only for children 16 years old and younger. For older children, parents would receive $500 per dependent — which cuts deeply into their tax savings.

Also, the couple with the younger children would see their $2,059 tax cut reduced over time. That’s because the child tax credit — unlike the old personal exemption — is not indexed to inflation, and it expires in 2025. “While the higher CTC would help many families today, inflation would erode the additional benefit over time,” Howard Gleckman, a senior fellow at the Tax Policy Center, writes.

Tax Policy Center, Dec. 22, 2017: Over time, the net benefit of the combination of an expanded CTC and the loss of personal exemptions would narrow because the personal exemption amount is indexed for inflation but the CTC is not. Because all the individual income tax provisions of the TCJA would expire after 2025 except for the less generous inflation measure for indexing the tax system, both families would see a modest tax increase in 2027.

By 2027, both of the couples would be paying $150 more in taxes, the Tax Policy Center says. TPC did not provide estimates for years other than 2018 and 2027.

The Republican Line: Pennsylvania

In Pennsylvania’s 18th Congressional District, the Congressional Leadership Fund has aired several ads that attack Lamb, the Democratic candidate, for opposing the GOP tax law changes.

One ad (below) starts by saying, “Conor Lamb isn’t telling you the truth. Lamb doesn’t support a middle class tax cut. Fact: Lamb opposed the $2,900 middle class tax cut, calling it a ‘complete betrayal.’”

Lamb says he supports a middle-class tax cut, just not this tax cut.

On Dec. 1, Lamb did call the Republican tax bill “a complete betrayal,” because he said it gives too much of a tax break to the wealthy. Lamb tweeted this in response to Sen. Claire McCaskill’s complaint that lobbyists had written amendments for the Republican tax bill at the 11th hour: “Complete betrayal of the middle class. We were promised infrastructure & jobs, instead we get big tax cuts for the rich written by & for corporate lobbyists. People in #PA18 are tired of being lied to. We’ll put an end to this hypocrisy on March 13th.”

As it did in other ads airing in the Pennsylvania race, the Congressional Leadership Fund says in this ad that the new tax law will provide a “$2,900 middle-class tax cut” for taxpayers in Pennsylvania’s 18th Congressional District. That’s more than a third higher than the Republicans say the “typical family” in the U.S. would receive.

The ad provides no information on which families might see a $2,900 tax cut — except for a footnote that gives the source as the House Ways and Means Committee. On its website, the Republican committee staff says it estimated how much the tax cut would save families in every congressional district based on the U.S. Census median household income for a family of four in that district.

For the 18th Congressional District in Pennsylvania, the committee based its estimate on a household income of $100,920. But the median household income for a family with children under 18 years old in the 18th District is $91,983, according to the U.S. Census. The median family income — which takes into account all family types — is $81,024 for that district.

The $2,900 savings is also subject to the same caveats as the $2,000 savings for the “typical” U.S. family. The tax cut would be less for families with children 17 years and older, and the tax savings would be smaller over time as certain provisions of the law take effect or expire.

As we have said before, the impact of the tax bill varies, depending on each taxpayer’s income, tax credits, deductions and expenses. For personalized estimates, the IRS has developed a tool that allows taxpayers to estimate how much they should withhold in federal taxes in 2018 — which will give taxpayers an indication of how much their tax liability has changed since last year.

Sources

H.R.1. An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018. 115th Congress (2017-2018). Enacted 22 Dec 2017.

Robertson, Lori. “Democrats’ Misleading Tax Line.” FactCheck.org. 26 Jan 2018.

Senate Majority PAC. “MP LAUNCHES AD CAMPAIGN IN MISSOURI AND INDIANA TO COMBAT THE KOCH BROTHERS’ WAR AGAINST MIDDLE-CLASS FAMILIES.” Press release. 15 Feb 2018.

Gurdus, Elizabeth and John Schoen. “Here are 3 key Senate races that show why Democrats are at risk of losing seats in 2018.” CNBC.com. 21 Feb 2018.

Tax Policy Center. “Distributional Analysis of the Conference Agreement for the Tax Cuts and Jobs Act.” 18 Dec 2017.

Matthews, Dylan. “The Republican tax bill got worse: now the top 1% gets 83% of the gains.” Vox. 18 Dec 2017.

Stein, Jeff. “Republicans explain why their tax cuts are temporary, but not really temporary.” Washington Post. 30 Nov 2017.

CNBC.com. “GOP plan will ultimately raise taxes on 50% of Americans, nonpartisan assessment says.” Associated Press. 20 Nov 2017.

Deto, Ryan. “Pennsylvania Democrats criticize the new tax cuts for overwhelmingly benefiting the wealthy.” Pittsburgh City Paper. 28 Feb 2017.

Bade, Rachael and Sherman, Jake. “Tim Murphy resigns from Congress.” Politico. 5 Oct 2017.

Ward, Paula Reed. “Rep. Tim Murphy, popular with pro-life movement, urged abortion in affair, texts suggest.” Pittsburgh Post-Gazette. 3 Oct 2017.

Joint Committee on Taxation. “Estimated Budget Effects Of The Conference Agreement For H.R.1, The ‘Tax Cuts And Jobs Act.'” 18 Dec 2017.

Robertson, Lori. “A Campaign Full of Mediscare.” FactCheck.org. 22 Aug 2012.

Congressional Budget Office. “The 2017 Long-Term Budget Outlook.” 30 Mar 2017.

Weixel, Nathaniel. “Tax bill could fuel push for Medicare, Social Security cuts.” The Hill. 3 Dec 2017.

Joint Committee on Taxation. “Macroeconomic Analysis Of The Conference Agreement For H.R. 1, The ‘Tax Cuts And Jobs Act.‘” 22 Dec 2017.

Soergel, Andrew. “After Tax Overhaul, GOP Sets Sights on Medicare, Social Security.” U.S. News and World Report. 7 Dec 2017.

Stein, Jeff. “Ryan says Republicans to target welfare, Medicare, Medicaid spending in 2018.” Washington Post. 6 Dec 2017.

Pramuk, Jacob. “Paul Ryan says he doesn’t think the House will pass Social Security, Medicare reform this year.” CNBC.com. 12 Jan 2018.

Goodkind, Nicole. “Republicans will cut Social Security and Medicare after tax plan passes, says Marco Rubio.” Newsweek. 1 Dec 2017.

Politico. Full video of Playbook Interview: Sen. Marco Rubio. 29 Nov 2017.

Demirjian, Karoun. “McConnell: Entitlement reform is a nonstarter in the Senate in 2018.” Washington Post. 21 Dec 2017.

Gibson, Ginger and Oliphant, James. “Trump budget seeks cuts to domestic programs, Medicare, favors military and wall.” Reuters. 12 Feb 2018.

Alonso-Zaldivar, Ricardo. “Winners and losers under Medicare drug plan in Trump budget.” Associated Press. 13 Feb 2018.

Press release. “New $1 Million AAN Ad Campaign Promotes Tax Cuts For Middle-Class Families.” American Action Network. 5 Mar 2018.

Hardison, Lizzy. “SD-37: Natalie Mihalek Seeks Republican Nomination in Special Election.” PoliticsPA. 19 Jun 2015.

O’Toole, James. “GOP nominates Reschenthaler for Pennsylvania Senate in 37th.” Pittsburgh Post-Gazette. 11 Jul 2015.

Press release. “By the Numbers: Tax Cuts and Jobs Act Delivers Tax Cuts for Families in Every Congressional District.” House Ways and Means Committee, Republican staff. 21 Dec 2017.

Press release. “$2,059: Speaker Ryan Talks Tax Cuts on the Morning Shows.” House Speaker’s Office. 20 Dec 2017.

“Updated Effects of the Tax Cuts and Jobs Act on Representative Families.” Tax Policy Center. 22 Dec 2017.

Kiely, Eugene. “A Guide to the Tax Changes.” FactCheck.org. 20 Dec 2017.

Gleckman, Howard. “The Hidden Tax Increase In The Big Six Tax Outline.” Tax Policy Center TaxVox. 3 Oct 2017.

U.S. Census Bureau. “Median income in the past 12 months (in 2016 inflation-adjusted dollars). Congressional District 18 (115th Congress), Pennsylvania.” Accessed 6 Mar 2018.

U.S. Internal Revenue Service. “IRS Withholding Calculator.” IRS. Undated. Updated 7 Mar 2018.

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Politicians often make the same claims over and over again, leaving us fact-checkers empathizing with Bill Murray’s character in that 1993 classic “Groundhog Day.” This week was no different.

To highlight the repeats we’ve debunked before, we launched a feature during the 2016 election called “Groundhog Friday.” We’d be remiss to let Friday, Feb. 2 go by without comment. So, here’s our roundup of the past week’s reruns. Happy Groundhog (Fri)Day.

Vice President Mike Pence on job growth, Jan. 31, remarks at a Republican congressional retreat. “Because of what we’ve done — in rolling back red tape, and unleashing American energy, and cutting taxes for working families and businesses small and large — since Election Day, 2.4 million new jobs created across America.”

President Donald Trump on job growth, Jan. 26, remarks at the World Economic Forum: “Since my election, we’ve created 2.4 million jobs, and that number is going up very, very substantially.”
And he said it again on Feb. 1 at the Republican congressional retreat.

Just as the president did in his State of the Union address, he and Pence take credit for more than a half a million jobs created under then-President Barack Obama. Since Trump took office in January 2017, the job gain had been 1.84 million when the two men spoke. (The total under Trump is now 200,000 higher with the January job numbers that were released Feb. 2.) But the administration has been pumping up its number by starting the clock in October, the month before the election.

The president on Feb. 1 called the job gains “unthinkable,” but the job creation under Trump actually lags behind the job gains in each of the previous four years, as we’ve written before.

“FactChecking Trump’s State of the Union,” Jan. 31

House Minority Leader Nancy Pelosi on the GOP tax law, Jan. 29, interview at the Washington Post: “This is unconscionable that they would have 83 percent of the benefits going to the top 1 percent.”

This is a misleading Democratic talking point. According to a Tax Policy Center analysis of the new tax law, Pelosi’s claim is accurate, but only for 2027 and only because most of the individual income tax changes in the law expire by then. In 2025, a quarter of the tax cut benefits go to the top 1 percent, and in 2018, the figure is 20.5 percent. Republicans wrote the law with these sunsetting provisions so that they could pass it with a simple majority in the Senate using reconciliation rules. They say the tax cuts will be extended by a future Congress.

“Democrats’ Misleading Tax Line,” Jan. 26

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The Line: The top 1 percent will get 83 percent of the tax cuts under the new tax law.

The Party: Democratic

The Republican tax plan was signed into law just last month, and Democrats already have a well-worn, and misleading, talking point about it: 83 percent of the tax cuts go to the wealthiest 1 percent. That’s true for 2027 but only because most of the individual income tax changes expire by then.

In 2025 — the last year before those tax changes expire — a quarter of the tax cuts go to the top 1 percent.

It’s a classic case of politicians using a technically accurate statistic but without the context or explanation it requires. Without all the facts, the talking point leaves a misleading impression.

Democratic Sen. Sherrod Brown of Ohio used a version of the tax line in a Jan. 23 press availability, saying that “more than 80 percent of that tax cut went to the — goes to the wealthiest 1 percent.” But he’s part of a long list of Democrats who favor the phrase.

House Minority Leader Nancy Pelosi repeatedly has said that “83 percent of the benefits go to the top 1 percent.” It’s a line included in Senate press releases and emphasized three times in one Democratic press availability in late December, by Senate Minority Leader Chuck Schumer (twice) and Sen. Bernie Sanders, who did note that this was “at the end of 10 years” and that the “middle class” tax breaks “expire at the end of eight years.”

The important missing context is that the final tax legislation, which President Donald Trump signed into law Dec. 22, allows most of its individual income tax provisions to expire by 2027, making the tax benefit distribution more lopsided for the top 1 percent than in earlier years.

In 2018, according to an analysis by the Tax Policy Center, the top 1 percent of income earners would glean 20.5 percent of the tax cut benefits — a sizable chunk, but far less than the figure that’s preferred by Democrats. And in 2025, that percentage would be 25.3 percent, with the top 1 percent (those earning above $837,800) getting an average tax cut of $61,090.

Just two years later, in 2027, the percentage of tax benefits to this income group jumps to 82.8 percent, “because almost all individual income tax provisions would sunset after 2025,” explains TPC. The top 1 percent still benefits from some of the remaining tax cuts, such as reducing the top corporate tax rate from 35 percent to 21 percent. But their average tax cut drops by nearly two-thirds to $20,660 in 2027.

So while a lot more of the benefits go to the top 1 percent that year, there are fewer benefits to go around. Without those individual income tax provisions, all taxpayers see an average $160 tax cut in 2027, while the average tax cut for all taxpayers in 2025 is $1,570.

Why do these individual tax cuts expire in the law? Republicans say they expect a future Congress will extend those cuts, rather than allowing taxes for many to increase. But in order to pass their tax bill through budget reconciliation, a process requiring only a majority vote in the Senate, Republican lawmakers could not add more than $1.5 trillion to the deficit over 10 years. Nor could they have a bill that added to the deficit beyond that 10-year window.

The Committee for a Responsible Federal Budget calls the expiring cuts “gimmicks.” It notes that “the ‘easy’ options” for Republicans to make the final bill meet those requirements were to have some of the tax cuts expire — and that’s what GOP lawmakers did. While the final bill costs an estimated $1.46 trillion over 10 years, CRFB says the actual cost could end up being $2.2 trillion, when these sunsetting tax cuts are actually extended. 

One might argue the Republicans practically wrote this talking point themselves by constructing the legislation this way. The Tax Policy Center and other groups that analyze such legislation had to provide the relevant figures for 2027. 

“The effect of turning off those individual income tax cuts would be dramatic,” TPC senior fellow Howard Gleckman wrote. “Households making less than $155,000 in 2027 would get no tax cut at all, on average. And more than half of all households would pay more in taxes than under the pre-TCJA, mostly because the new law permanently shifts to a less generous method for indexing the tax code for inflation. As a result, nearly 83 percent of all the benefits of the TCJA in 2027 would go to the top 1 percent of households.”

A spokesperson for the Democratic minority on the Senate Finance Committee told us that this statistic is “a key data point to our argument that Republicans’ tax law is an economic double standard. … The fact is, Republicans chose to make permanent massive tax cuts for multinational corporations while writing tax cuts for middle class families in disappearing ink.”

But Democrats are giving voters a misleading view of the new law’s impact. The proportion of tax benefits going to the top 1 percent is much lower in earlier years — before the individual tax cuts expire — than this talking point reveals.

The post Democrats’ Misleading Tax Line appeared first on FactCheck.org.

President Donald Trump misleadingly inflated the benefits of the tax overhaul when he claimed it provides “$3.2 trillion … in tax cuts for American families.” It actually totals about $1.5 trillion in tax cuts for all taxpayers, including corporations.

Trump shows only one side of the tax ledger. He counts tax changes that cut taxes and ignores those that will increase taxes.

For example, doubling the standard deduction results in $720 billion less in tax revenues over 10 years, but repealing personal exemptions increases tax revenues by more than $1.2 trillion.

Trump’s one-sided description of the tax benefits of the bill came in remarks at the White House as Republican lawmakers celebrated passage of the tax bill, which he signed Dec. 22.

Trump, Dec. 20: Records all over the place, and that will continue and then some because of what we did.  But $3.2 trillion — just think of it — in tax cuts for American families, including doubling the standard deduction and doubling the child tax credit.

That statistic was echoed in a White House fact sheet on the tax bill released the same day.

White House Fact Sheet, Dec. 20: The Tax Cuts Act provides $5.5 trillion in tax cuts, $3.2 trillion, or nearly 60 percent, of which go to families.

It was also parroted in a tweet from Ivanka Trump, the president’s daughter.

Today marks a great win for all Americans. The Tax Cuts and Jobs Act provides $5.5 trillion in tax cuts, $3.2 trillion, or nearly 60 percent, of which go to families. #TaxReform @HouseGOP @SenateGOP

— Ivanka Trump (@IvankaTrump) December 20, 2017

It’s true that changes in the new law that would cut taxes — for individual, business and international taxes — comes to about $5.5 trillion, according to the Joint Committee on Taxation. But when all of the provisions are considered — including those that would raise tax revenue — the government’s nonpartisan Joint Committee on Taxation estimates the tax law will result in $1.456 trillion less paid in individual, business and international taxes to the U.S. government over the next 10 years.

That’s why major media outlets typically refer to it as a “$1.5 trillion tax bill.”

The president cited a subset of that $5.5 trillion, the amount that he said would go to “American families.”

To get to the $3.2 trillion figure, the White House tallied the provisions in the tax plan that would reduce tax revenues paid by families to the government, but similarly ignored provisions that would increase them. That includes:

• $1.2 trillion in cuts through changes to the tax brackets. The new law reduces five of the seven tax rates, including cutting the top rate from 39.6 to 37 percent.
• $720 billion by roughly doubling of the standard deduction (to $12,000 for singles and $24,000 for married people filing jointly).
• $573 billion in increased child tax credits.
• $637 billion in relief from the alternative minimum tax, which is paid by high-income taxpayers instead of using the regular tax system to calculate tax liability.
• Another roughly $100 billion from things like expansion of medical expense deductions, and reduced estate tax revenues.

What it does not include are the many offsets in the tax plan. The biggest is the elimination of personal exemptions — which is a deduction taxpayers receive for each person claimed on tax returns.

Under the old tax code, filers received a personal exemption of $4,050 per person, which means a married couple with two dependents receives a personal exemption of $16,200. That goes away under the new law (though as written, it would return after 2025). That provision will increase revenue to the government by a little more than $1.2 trillion over 10 years.

But there are other measures that work against taxpayers, including new limits on itemized deductions such as for state and local income taxes and some mortgage deductions.

According to the Joint Committee on Taxation, changes to the tax code would, on net, result in a little more than $1.1 trillion less being paid in individual taxes over the next 10 years. We can’t say exactly how much of that goes to families, since some business owners — such as partners in limited liability corporations — pay taxes through personal income taxes.

More importantly, it is misleading to refer to the cuts without including the increases. It would be similarly misleading — and absurd — for opponents of the tax plan to refer only to the tax increases.

“Taxpayers care about the bottom line of how much they owe, not how much the beneficial provisions alone help them, ignoring those provisions that raise their taxes,” Eric Toder, co-director of the Tax Policy Center, told us via email.

Overall, the tax plan will reduce taxes for most people in the first eight years. The Tax Policy Center analyzed the tax bill and concluded that most taxpayers at all income levels would get a tax cut in the years 2018 through 2025. As written, some of the individual tax benefits would expire and as a result, by 2027 more than half of taxpayers would pay higher taxes.

Tax Policy Center, Dec. 20: We find the bill would reduce taxes on average for all income groups in both 2018 and 2025. In general, higher income households receive larger average tax cuts as a percentage of after-tax income, with the largest cuts as a share of income going to taxpayers in the 95th to 99th percentiles of the income distribution. On average, in 2027 taxes would change little for lower- and middle-income groups and decrease for higher-income groups. Compared to the current tax law, 5 percent of taxpayers would pay more tax in 2018, 9 percent in 2025, and 53 percent in 2027.

It is fair to say that the tax plan would cut taxes. But reporting only one half of the ledger — just the benefits and not the offsets — is misleading, and inflates the overall impact of the tax changes. The Joint Committee on Taxation says it would cut taxes by nearly $1.5 trillion over 10 years. That’s the unspun figure.

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The Tax Cuts and Jobs Act is now law.

The House and Senate approved the bill on Dec. 19. It passed 227-203 in the House with no Democratic votes and 12 Republican “no” votes. The Senate then passed the bill 51-48 along strict party lines, with one Republican senator, John McCain, not voting.

Because of minor changes in the bill made by the Senate, the House was required to pass the bill again before sending it to the president. The House gave final approval on Dec. 20 by a 224 to 201 vote. Again, the bill received no Democratic support and was opposed by 12 Republicans. President Donald Trump signed it on Dec. 22.

Here we compare some of the major provisions of the new law with the previous tax code.

Individual Income Tax Rates

The bill maintains seven individual income tax brackets, but changes the tax rates and thresholds. See the charts below.

Previous law: These are the tax brackets that individual taxpayers will use when filing taxes in 2018 for the 2017 tax year, according to the IRS (see pages 7-9).

New law: These will be the brackets that individual taxpayers will use in 2019 for the 2018 tax year, as described in Table 4 on page 200 of the conference report. This new rate structure is temporary. It takes effect with the 2018 tax year, but will not apply after 2025 — unless Congress takes further action.

Individual Alternative Minimum Tax

The AMT is a parallel tax system with a separate set of rules that some taxpayers must follow when calculating their tax liability. As its name implies, the AMT is an alternative to the regular tax system and requires taxpayers earning above a certain amount to calculate their taxes twice and pay the highest amount.

Because it follows a separate set of rules, the AMT disallows some tax preferences – such as state and local tax deductions and dependent exemptions – but provides for a larger AMT exemption amount.

Previous law: For the 2017 tax year, the AMT exemption amount for single filers is $54,300 and begins to phase out at $120,700, and for joint filers, it is $84,500 and begins to phase out at $160,900, according to the IRS.

New law: The AMT exemption amounts will increase to $70,300 for single filers and $109,400 for joint filers and will phase out for those taxpayers at $500,000 and $1 million, respectively, according to the nonpartisan Tax Policy Center’s analysis of the bill. These changes will end after 2025.

Standard Deduction

The standard deduction is the amount that you can deduct from your income before calculating your tax liability if you do not itemize your deductions.

Previous law: The standard deduction for married filing jointly is $12,700 for tax year 2017; $6,350 for single taxpayers; and $9,350 for heads of households, according to the IRS.

New law: The standard deduction for married filing jointly would increase to $24,000 for joint filers; $12,000 for single taxpayers; and $18,000 for heads of households, according to the TPC analysis. The increased deduction ends after 2025.

Personal Exemption

A personal exemption is the amount that you can deduct from your income for every taxpayer and most dependents claimed on your return.

Previous law: $4,050 per person, which means a married couple with two dependents would receive a personal exemption of $16,200.

New law: The personal exemption is eliminated. The exemption returns after 2025.

Child Tax Credit

Previous law: Married couples filing jointly who earn less than $110,000 can receive a tax credit of up to $1,000 for each child under 17 years old that they claim as dependents on their tax returns ($55,000 is the threshold for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers). (See the TurboTax FAQ on the tax credit for more details.)

New law: The credit would increase to up to $2,000 per child, and the first $1,400 would be refundable according to the TPC analysis, meaning the credit could reduce your tax liability below zero and you would still be able to receive a tax refund. The cut off for the tax credit would increase from $110,000 to $400,000 for married couples filing jointly. The expanded credit ends after 2025.

State and Local Tax Deductions

Previous law: Taxpayers who itemize their taxes can deduct state and local property and real estate taxes, and either state and local income or sales taxes. For more information, see our item “The Facts on the SALT Deduction.”

New law: The SALT deduction will be capped at $10,000. The deduction limit ends after 2025.

Mortgage Deductions

Previous law: Taxpayers who itemize their taxes can deduct interest payments on mortgage debt of up to $1.1 million. That includes up to $100,000 of home equity debt.

New law: For current mortgage holders, there is no change. But the deductible limit drops to $750,000 for new debt incurred after Dec. 31, 2017. Also, homeowners may not claim a deduction for existing and new interest on home equity debt, beginning Jan. 1, 2018. The mortgage deduction changes expire after 2025.

Medical Expense Deduction

Previous law: Taxpayers who itemize their taxes can deduct medical expenses that exceed 10 percent of their adjusted gross income, or AGI, according to the IRS.

New law: Taxpayers can deduct medical expenses that exceed 7.5 percent of AGI in 2017 and 2018, but the new deduction level ends Jan. 1, 2019.

Limits on Itemized Deductions

Previous law: Itemized deductions may be limited, and total itemized deductions may be phased out (reduced), if your adjusted gross income for 2017 exceeds $313,800 for married couples filing jointly or qualifying widows ($261,500 for single filers, $287,650 for heads of household and $156,900 for married couples filing separately), according to the IRS.

New law: The itemized deduction limits are repealed through the 2025 tax year.

Inflation Rate Measure

Previous law: The IRS uses the Consumer Price Index for urban consumers to adjust tax bracket thresholds and other tax provisions for inflation. That includes such provisions as the standard deduction, the personal exemption, earned income tax credit and the alternative minimum tax, as the Tax Policy Center explains.

New law: The IRS would switch to an inflation index known as the chained CPI. As we have written, chained CPI is considered a more accurate measure, but rises somewhat more slowly than the traditional CPI. That would mean bracket thresholds and tax credits, for example, would rise more slowly. That could have the effect over time of pushing more people into higher tax brackets and reducing the purchasing power of tax credits.

Capital Gains Tax Rate

Capital gains are the profits realized from the sale of assets such as stocks or real estate.

Previous law: The profits on the sale of assets held for more than one year are eligible for a tax break. Turbo Tax explains the 2017 tax rates this way for the profits gained from the sale of such assets: “For 2017, the long-term capital gains tax rates are 0, 15, and 20 percent for most taxpayers. If your ordinary tax rate is already less than 15 percent, you could qualify for the zero percent long-term capital gains rate. For high-income taxpayers, the capital gains rate could save as much as 19.6 percent off the ordinary income rate.”

New law: No changes.

Estate Tax

Previous law: A top rate of 40 percent applies in 2017 to estates valued at more than $5.49 million (nearly $11 million for couples), according to the IRS.

New law: The top rate of 40 percent would apply to estates valued at more than $11.2 million ($22.4 million for couples). The increased levels expire after 2025.

Corporate Taxes

Previous law: The top corporate rate was 35 percent.

As with some high-income individual taxpayers, corporations are also required to calculate their tax liability using the corporate alternative minimum tax — a parallel system that reduces or eliminates some deductions and tax credits. After calculating tax liability using both the regular corporate income tax system and the corporate AMT, corporations pay the higher of the two amounts.

New law: The top rate would be 21 percent, and the corporate AMT would be repealed, as described in Bloomberg’s guide to the final tax bill.

Pass-Through Business Taxes

Previous law: Businesses organized as sole proprietorships, LLCs and partnerships don’t pay corporate tax rates. Instead, the owners pay individual income taxes on their share of business income – they’re called pass-through business taxes. Those tax rates are the same as the individual income tax rates.

New law: Business owners can take a 20 percent deduction on their pass-through business income, with limits for those earning above $157,500 (single) and $315,000 (married, filing jointly).

Revenue Impact

The changes in the tax code are expected to reduce federal tax revenues by an estimated $1.46 trillion over 10 years, according to the nonpartisan Joint Committee on Taxation.

Editor’s Note: Our full coverage of the Republican tax legislation can be found here.

Updated, Dec. 22: This story has been updated to reflect that the president signed the bill into law on Dec. 22.

The post A Guide to the Tax Changes appeared first on FactCheck.org.

Rep. Kevin Brady, the chairman of the House tax-writing committee, made misleading claims about the Tax Cuts and Jobs Act passed by the House earlier this month:

• Brady said “70 percent of the tax relief goes to those families making less than $200,000.” But that refers only to the individual income tax changes and only for 2019. By 2027, 50 percent of tax relief as a result of business and individual tax changes would go to those making more than $200,000 a year, according to congressional tax analysts.
• Brady said his bill provides “tax relief at every level.” That’s true initially, according to congressional analysts, but over time some income levels will pay more in taxes. That’s because the bill ends a new tax credit after 2022 and changes how tax brackets are adjusted for inflation, pushing more people over time into higher tax brackets.

Brady made his remarks on Fox News’ “Sunday Morning Futures” when he was asked if the House tax plan cuts taxes “on people who don’t pay taxes” and raises taxes “on the people who pay taxes.” In his answer, Brady talked about taxpayers with income of up to $200,000, which he described as the “range of middle class … that we all worry about.”

Brady, Nov. 26: The answer is no. We provide tax relief at every level under the House tax reform plan that we passed; 70 percent of the tax relief goes to those families making less than 200,000.

As we have written, both parties have emphasized the impact of the tax plan on the so-called “middle class.”

The House Democrats have criticized the plan as a windfall for the wealthy at the expense of the middle class. They cite, among other things, provisions in the House bill that would cut the corporate tax rate from 35 percent to 20 percent, abolish the alternative minimum tax, eliminate most itemized deductions and abolish the estate tax.

The House Republicans — as Brady has done — say the bill will provide tax relief at every level. They cite the House bill’s provisions that would increase the child tax credit from $1,000 to $1,600, create a new family tax credit of $300 per parent and non-child dependent, and nearly double the standard deduction to $24,400 ($12,200 for single taxpayers).

The bill would also collapse the seven income tax brackets, ranging from 10 percent to 39.6 percent, to four (12 percent, 25 percent, 35 percent and 39.6 percent).

First, let’s look at Brady’s claim about families making less than $200,000 receiving most of the tax relief under the House bill.

Brady, the chairman of the House Committee on Ways and Means, got the 70 percent figure from a Nov. 13 analysis of the House tax plan by the Joint Committee on Taxation, the official congressional scorekeepers. But his committee spokesperson said Brady was not referring to the entire tax plan — just the changes to the individual income tax code for the year 2019.

The JCT report indeed shows (first chart on page 6) that the individual income tax side of the House proposal would reduce taxes by $121.8 billion in 2019, and about $84 billion of that, or 69 percent, would go to those earning $200,000 or less.

But cherry-picking one piece of the tax plan and looking at just one year ignores the overall impact of the legislation and how the impact on taxpayers changes over time.

The JCT analysis provided multiple charts that estimate the impact of the tax changes on various income groups over 10 years in two-year increments. One of the charts measures the change in federal business and individual income taxes by income group for 2019, 2021, 2023, 2025 and 2027. Using that chart, we calculated that 57.7 percent of the tax relief goes to those families making less than $200,000 in 2019 — not the 70 percent that Brady cited for 2019.

By 2027, 50 percent of tax relief as a result of business and individual income tax changes would go to those making more than $200,000 a year.

A spokesperson for the Ways and Means Committee said that Brady used the JCT estimate for individual income taxes, rather than its estimate that combines business and individual taxes, because the chairman believes the JCT underestimates the benefits of the business cuts on “middle-class” taxpayers.

As we have written, JCT and the Congressional Budget Office estimate that 25 percent of the corporate tax burden falls on workers. But Brady sides with economists who say it is higher than that, which would mean that corporate tax cuts would benefit workers more than estimated by the JCT.

Brady made none of that clear in his interview. Instead, Brady cherry-picked the findings of the JCT report to present a more favorable tax outcome for the “middle class” than contained in the congressional analysis.

Brady also misled viewers when he claimed that the House bill provides “tax relief at every level.”

JCT doesn’t explain why, but its analysis shows that some income groups would pay more in taxes beginning in 2023. That also happens to be the year that the House bill ends the new family tax credit. This new tax credit (in section 1101 of the bill) would provide families with a $300 tax credit per parent and non-child dependent, but only until Jan. 1, 2023.

In 2023, for example, taxes would increase compared with current law by $302 million for those earning less than $10,000 and nearly $1.9 billion for those earning between $20,000 and $30,000. (See chart below.)

In unveiling the tax bill, House Speaker Paul Ryan touted that a typical family of four (with a median household income of $59,000) would see a $1,182 tax cut. But David Kamin, a professor at New York University School of Law who served as a special assistant to President Obama for economic policy, writes that Ryan’s hypothetical family would have to pay more in taxes beginning in 2024, in part because of the expiration of the new family tax credit.

Over time, those in the upper-income categories would pay more in taxes, too.

Why? Howard Gleckman, a senior fellow with the nonpartisan Tax Policy Center, told us that’s in large part because the House bill would use a less generous measure of inflation to index tax brackets.

Under the current tax code, the IRS uses the Consumer Price Index for urban consumers to adjust tax bracket thresholds for inflation. But the House bill would switch to an index known as chained CPI. As we have written, chained CPI is considered a more accurate measure, but it would mean bracket thresholds would rise more slowly and push more people into higher tax brackets.

The JCT analysis shows that those with incomes between $200,000 and $500,000 would pay more in taxes in 2023 and 2025 than under current law, and those earning between $500,000 and $1 million would pay more in taxes in 2023.

“The changed pattern in the later years is because of the expiration of the family credits and the effects of the chained CPI,” Gleckman told us in an email.

We should also note that even in the earlier years there will be winners and losers, despite Brady’s claim that the House bill provides “tax relief at every level.” TPC estimates that about 7 percent of households in 2018 would pay an average of $2,100 more in taxes under the House bill, and that nearly one-quarter would pay more in 2027.

“The bills’ effects on individual households would be highly idiosyncratic and will depend on where you live, how many children you have, and how you make your living,” Gleckman told us. “If you live in a high tax state with lots of kids, and get paid a salary, you likely will lose. If you have one child, live in a low-tax state, and own investment partnerships, you will do very well.”

A House Ways and Means Committee spokesperson told us that the economic benefits of the tax plan will result in higher wages and offset the tax increases projected by the JCT. That’s a matter of dispute.

The CBO, in cooperation with the JCT, is required by law to produce a “dynamic” analysis that accounts for the economic impact of major legislation. But it did not have time before the Nov. 16 House vote to conduct such an analysis. It still hasn’t done one, although the Washington Post reports that congressional analysts are rushing to get one done before the Senate vote — a vote that could come as early as Dec. 1.

Brady ended his answer on “Sunday Morning Futures” by saying: “At the end of the day, I think everyone is going to keep more of what they earned.” But that’s not a promise he can make.

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