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The U.S. Congress report cautions that tax reform will threaten billions of dollars in the welfare of the poor

December 02, 2017 at 20:02
source: First Financial Daily
edit:Oriental wealth network

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Summary
The tax reform legislation led by President Trump has entered a crucial period. A report by the U.S. Congressional Budget Office (CBO) said billions of federal benefits, which should belong to low-income groups in the United States, may have fallen under the tax reform proposed by Senate Republicans.

The tax reform legislation led by President Trump has entered a crucial period. A report by the U.S. Congressional Budget Office (CBO) said billions of federal benefits, which should belong to low-income groups in the United States, may have fallen under the tax reform proposed by Senate Republicans.

  Medicare coverage narrowed

On November 16 local time, the U.S. House of Representatives passed the tax reform bill with a 227: 205 vote, officially launching the most far-reaching tax reform in the United States in 31 years.

Last week, the Senate announced for the first time a comprehensive tax reform bill. If the move goes smoothly, it will first vote in the Senate on the 30th. If it continues to pass, it means that the two houses reach an agreement. Then Trump can exercise the presidential power to sign the tax Change the motion to make it a U.S. law.

Earlier, Trump set a timetable for law passed before Congress and signed before Christmas. However, the parliamentary phase has already exceeded the expected time.

The Senate version of the tax reform bill proposes to reduce the corporate tax rate from 25% to 20% and repeal the Affordable Care Act provisions that most Americans must buy insurance.

The CBO reported that the Senate version of the tax reform bill that caused a huge loss to the U.S. low-income population was largely due to the repeal of the "mandatory insured" rule. Under the law, almost all Americans are obliged to buy health insurance or they will have to pay a fine for that. Abolishing the ordinance would result in a reduction of 13 million Americans covered by Medicare by 2027. The CBO found that most of those who gave up their health insurance may be low- and middle-income people.

According to the CBO report, by the time most of the clauses of the tax reform bill come into force, the current group with an annual income of less than 40,000 U.S. dollars will become even worse. On the other hand, high-income people will enjoy tax relief.

By 2027 more middle class in the United States will be hit after the terms of the personal income tax expire, and the CBO reports that only those groups earning more than $ 750,000 will benefit from the federal tax cuts.

Earlier, Republican Maine Republican Susan Collins warned that tax cuts enjoyed by low- and middle-income taxpayers could be offset by higher premiums, should the Phillies Medical Act's mandate be repealed.

  High-income people have more benefits

Of course, there are also Republican Republicans who criticize the CBO's analysis, saying the bill does not cut federal support for Medicaid or Obamacare subsidies.

Experts have different opinions on CBO's methodology. Some people claim that it is reasonable to quantify the reduction in government benefits, while others think that canceling the Medicaid should not be considered as a tax increase.

Gordon Mermin, a senior associate research fellow at the Tax Agency for Independent Institutions, argues that it depends on whether people feel that compulsory enrollment is necessary for people to get Medicare and benefits.

In addition to the CBO, many analysts also found that the tax reform bill brings more benefits to high-income people than low-income people.

The tax policy center released a report earlier this month saying Republicans' tax reform plan will allow nearly half of the benefits to flow into the pockets of one of the richest 1% taxpayers in the United States. The agency based on the previous House of Representatives tax reform plan study found that tax reform, the United States 1% of the taxpayers, after-tax income is likely to increase by 2.2%, while median income taxpayers may increase by about 0.4%, and more Low-income taxpayers have almost no change in after-tax income.

Tax experts at the Center for Tax Policy Analysis say it is not surprising to see more benefits for high-income groups, as abolishing inheritance taxes does benefit the wealthy. In the United States, the issue of estate tax usually only exists in very few A small part of the super rich family. In addition, federal corporate income tax rates have dropped and the rich benefited as well, since the overwhelming majority of the rich are entrepreneurs. In addition, tax cuts for small businesses and tax intermediaries will also benefit these business owners.

                (Editor: DF150)

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