One of the most frequent criticisms of the recently passed Republican tax overhaul centers on how the bill helps the middle class in the short term but largely benefits only the richest Americans in the long run.
In order to meet budget reconciliation rules to pass the bill without Democratic votes, Republicans made individual tax cuts temporary in their bill. Corporate tax cuts, however, are permanent. Barring further congressional action, most new individual tax cuts will expire in 2025.
Larger and permanent tax cuts for corporations coupled with the doubling of the cap for the estate tax exemption have led to frequent criticism that the new bill disproportionately benefits the wealthy rather than the middle class. Still, the White House has been quick to tout the new bill as a victory for the middle class.
But at a dinner party at his Mar-a-lago resort on Friday, President Donald Trump was singing a different tune. “You all just got a lot richer,” the president told guests and friends at the resort, CBS News reported.
The president's candid remark to guests at his resort, where members pay $200,000 to join and $14,000 annually, represent an inconvenient and unpopular truth about the GOP tax overhaul. Middle-class Americans will take home more money in the short term, but their benefit pales in comparison to that of the richest Americans.
That inconvenient fact could come back to hurt Republicans in 2018, with multiple polls indicating voters are aware of the disparity in benefit from the Republican tax bill. A recent NBC News/Wall Street Journal poll had 63 percent of respondents believing that the bill was designed to benefit corporations and the wealthiest Americans.
That same poll featured key members of the voter base that put Trump in the White House — rural Americans and white voters without college degrees — largely expressing a view that the bill was not a good idea. Only 28 percent of rural Americans believed the bill was a good idea.
In addition to the bill being unpopular with many key groups of voters, the wealth of misinformation circulating around the bill has likely further damaged the outlook for Republicans who may have hoped to see a boost from the passage of a key campaign promise.
Despite the nonpartisan Tax Policy Center finding that only about 5 percent of taxpayers would see an immediate increase in their taxes, 37 percent of those polled believed the bill would raise taxes on the middle class.
But that same nonpartisan analysis of the Republican bill concluded that by 2027, after many of the bill's individual tax cuts have expired, the percentage of taxpayers paying more would balloon to 53 percent. In that same year, 80 percent of the bill's benefits would be going to the top 1 percent of taxpayers.
And therein lies the truth of Trump's Friday remarks. His wealthy friends and Mar-a-Lago members will likely see the benefit of this tax bill in a greater way than many middle-class Americans. Congressional Republicans trying to communicate the benefits of their bill to help their bid to maintain a majority in 2018 probably just wish he hadn't said it out loud.