The report shows that the rich benefit and the poor are hurt in every way that it measures. For example, the effective tax rate—meaning the percentage that people, on average, actually pay after they take all deductions—changes in a precisely regressive form. The poorer you are, the higher your effective rate will rise. By 2027, only those making a hundred thousand a year or more will see an actual cut in their effective tax rate. And, as could be expected by now, the more they make, the greater the cut in their effective rate. By 2025, there is a direct transfer of money from the poor to the rich and corporations. This is not a flaw but the whole point, Harvard’s Martin Feldstein argues. Feldstein is, arguably, the single most widely respected Republican-leaning scholar of tax policy, and one of the few academics who came out in favor of the bill, in a Wall Street Journal op-ed. His defense, though, should not give much comfort to the bill’s proponents. He argues that cutting individual tax rates won’t increase economic growth and will add to the deficit—which, he acknowledges, is a bad thing. But he’s so excited about the corporate tax-rate cut that he thinks the bill should pass nonetheless. This is an odd stance, since the corporate rate cuts are about a third the size of the individual cuts.
That is the state of debate on this current bill. Its most respected defender acknowledges that three-quarters of the benefit are a wasted, harmful gift for the rich, but a quarter of the benefit goes to corporations, and we must assume they will spend it wisely.