- The Club for Growth, an influential conservative group, suggested it would not support the current version of the Republican tax bill, the Tax Cuts and Jobs Act.
- The group said proposed changes to the individual rates amounted to “class warfare.”
The Club for Growth, an influential conservative group, criticised the massive Republican tax plan on Tuesday, citing key issues in the current version of the legislation.
David McIntosh, the president of Club for Growth, said in a statement that the bill contained several provisions that would attack wealthy Americans unfairly.
“While the corporate tax cut will lead to some increase in our nation’s GDP, the rest of the provisions on individual taxpayers fails the pro-growth test,” McIntosh said.
The statement cited four specific issues with the bill on the individual side. They were:
- The top tax bracket of 39.6% for married couples making over $US1 million: “House Republicans are engaging in class warfare the likes of which would make Democrats green with envy,” McIntosh said.
- A “bubble tax” on wealthier Americans: A provision would add a tax on individuals’ earnings between $US1 million and $US1.2 million to claw back benefits from the 12% marginal tax rate. “That’s a real tax increase on successful people who invest and create jobs,” the statement said.
- The guardrails on pass-through businesses: The bill includes a provision designed to ensure that owners of pass-through businesses can only count a certain percentage of business profits toward the lower pass-through rate of 25%. The rest would be taxed at the individual income rate. “The blended, real effective marginal rate is at least 35% and can even be higher,” said McIntosh. “That means no tax cut at all for most small business and family-owned companies.”
- The six-year phase out of the estate tax: The Club for Growth wants the tax to be repealed immediately. “Our question is, why wait?” McIntosh said.
McIntosh did not close the door to possible support of the bill. He applauded the cuts to the federal corporate rate but said changes were needed overall.
“All in all, this bill must be changed if Republicans intend to keep their promise of real pro-growth, job-creating tax cuts,” the statement concluded.
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