By the end of the year, just 15 wealthy companies could reap a total of almost $25 billion in kickbacks from the tax bill championed by Congresswoman Mimi Walters (R-Irvine). Meanwhile, California families supporting children in college could see tax hikes of almost $2,000.
In a new analysis on the impact of the tax bill from the Institute on Taxation and Economic Policy (ITEP), “Fifteen of these companies collectively disclosed reducing their effective tax rates by $6.2 billion compared to the rates they faced in the first quarter of last year.” ITEP went on to note that just these 15 companies are on pace to snag $24.8 billion from the tax break in 2018 alone.
On the other hand, a separate analysis from the Franchise Tax Board shows how families in Walters’ home state of California will be hit with higher taxes this year. The study analyzed a sample of 300,000 Californian tax returns from 2015, and built a model to predict the impact of the Republican tax bill.
As an example, the analysis looks at a married couple making $130,000 with dependent children in college, noting they will see an $1,800 tax hike in 2018.
[The family has] itemized deductions worth $30,000 between state and local taxes, mortgage interest and charitable contributions. The family would lose $5,000 in deductions for state and local taxes. Their federal tax bill would climb about $1,800 to $13,980.
All in all, about a million individual households will pay roughly $12 billion more in taxes in 2018 alone — about half of what wealthy corporations will gain. And in the next decade, more than 5 million Californians will face a tax hike, says ITEP. That’s a far cry from the promise of Rep. Walters, who once claimed, “When all is said and done, California taxpayers will benefit from this historic tax package.”
Critics have long claimed the bill would benefit the wealthy at the expense of middle-class Americans. One Republican’s prediction looks to be coming true: “almost all of the bill’s tax cuts would be distributed to other states — leaving California with the bill.” One study showed homeowners in Orange County may owe $4,500 in additional taxes in 2018, due to provisions supported by Walters.
As more data about the Republican tax bill comes in, Republicans are finally being forced to admit the bill isn’t living up to the hype promised by those like Walters.
When talking about corporate profits, Florida’s Republican Sen. Marco Rubio said, “there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”