This week, Republican leaders are maneuvering to place Donald Trump’s tax cut proposal on top of Congress’ agenda. In turn, Trump is justifying this by claiming that his tax cuts are designed to help working-class families. But is this really the case?
We not only fact-check Trump’s tax spin, but we also speak with the experts about who truly benefits the most from these tax cuts.

“It’s clear that the working class, the middle class, were a complete afterthought here.”
– Chuck Marr, Center on Budget and Policy Priorities

As Trump pitches tax cuts at campaign-style events throughout the nation, he’s been claiming these tax cuts will primarily help the middle class. At his stop in Harrisburg, Pennsylvania last week, Trump told a group of truckers, “You’re going to make more money, you’re going to do better than ever before, and we truly admire you.”
In reality, though, Nevada’s top 1% of income earners would reap 71% of the rewards under Trump’s tax plan. Chuck Marr, Director of Federal Tax Policy at the Center on Budget and Policy Priorities, was quite blunt in explaining who benefits the most. “It’s clear that the working class, the middle class, were a complete afterthought here.”
How so? Marr pointed to the taxes Trump wants to cut the most: the top individual tax rate, from 39.6% to 35%, and the “pass-through” special business income rate, from 39.6% to 25%. Not only this, but Trump and Congressional Republican leaders want to completely eliminate the estate tax, which is currently at 40% and only applicable to the wealthiest 0.2% of American households. They also want to eliminate the alternative minimum tax (AMT), which is the tax that ensures high-income earners can’t use deductions and loopholes to avoid paying any income tax. According to Marr, “All of these benefits flow to high-income people.”

“All of these benefits flow to high-income people.”
– Chuck Marr, Center on Budget and Policy Priorities

In and of itself, Republicans’ tax cut proposal would provide limited economic benefit at best if it were to become law. However, even this limited boost would be completely canceled out by potential tax increases hitting middle and low income households. According to the Institute on Taxation and Economic Policy (ITEP), nearly 16% of Nevadans are at risk of paying an average $1,480 more in taxes. Due to the tax plan’s reliance on eliminating the personal exemption and SALT state and local tax deductions, even taxpayers who earn less than $40,000 a year are at risk of paying more in taxes.
On top of the inequitable distribution of tax cuts, working-class families would also be hit by the $5.8 trillion in budget cuts included in Republicans 2018 budget resolution. This includes a roughly $1 trillion cut to Medicaid, a $473 billion cut to Medicare, and a $650 billion cut to additional safety net programs like SNAP food assistance and Supplemental Security Income for people with disabilities.

“This could be devastating to the growth we’ve had in the past five years.”
– Assembly Member Maggie Carlton (D-Sunrise Manor)

Assembly Member Maggie Carlton chaired the Ways and Means Committee last legislative session, and has spent many sessions analyzing the nuts and bolts of the state budget. She’s worried about the Republicans’ proposed budget cuts, as about 30% of Nevada’s general revenues come from the federal government. “We have $100 billion coming into Nevada every year. […] This is a jobs bill.”
Carlton then added, “We’re still climbing out of the economic downturn. […] This could be devastating to the growth we’ve had in the past five years.” How so? Any cuts to any of these programs could ultimately affect hundreds of thousands of Nevadans. About 633,000 Nevadans receive health care through Medicaid and the Children’s Health Insurance Program (which is referred to here in Nevada Check Up). An additional 488,000 Nevadans are on Medicare, and about 440,000 Nevadans rely on SNAP for food security.

“This is not a balanced tax plan. This will not help most Nevada families.”
– Frank Clemente, Americans for Tax Fairness

It’s not just Nevada legislators who fear the economic implications of this tax and budget plan. Frank Clemente, Executive Director of Americans for Tax Fairness, summed up the Republican tax and budget plan this way: “A lot of middle class Nevadans will see a tax increase under this proposal. […] This is not a balanced tax plan. This will not help most Nevada families.”
Like this year’s Trumpcare proposals, Congressional Republicans have included reconciliation instructions in their 2018 budget resolution to make it easier for them to pass a tax cut package without Democratic votes. On Tuesday, the U.S. Senate voted to approve the Republican budget resolution on a 50-47 party-line vote. Senator Dean Heller (R) voted in favor, while Senator Catherine Cortez Masto (D) voted against.
Since Wednesday, the Senate has been voting on a series of proposed budget amendments. Thus far, Heller has been voting against Democratic amendments opposing the proposed budget cuts, while Cortez Masto has voted for undoing the budget cuts. The final Senate vote on the budget resolution is expected on Friday.