Progressive advocacy groups and their media allies are dismissing the recently passed Senate tax-cut bill as an attack on the middle class.
I am not part of the middle class — I grew up poor before achieving “The American Dream” by co-founding The Home Depot — but I spent my career helping middle-class Americans to achieve their personal and professional goals. I feel comfortable speaking on their behalf to rebut these attacks by people such as fellow billionaire Tom Steyer.
Mr. Steyer claims tax cuts are taken “out of the hides of working families across the country,” and he points to the oft-cited Tax Policy Center finding that 87 million Americans will see their tax burdens increase due to this bill.
What is left unsaid is that this finding is only possible if you make the unrealistic assumption that the bill’s middle-class tax cuts expire. In reality, no Congress would let this happen, but the bill must be framed this way because of Washington budget gimmickry.
So why would a so-called nonpartisan tax policy shop publicize such a misleading finding? Because it’s not nonpartisan at all: The Tax Policy Center is a project of the liberal Brookings and Urban institutes, which have received funding from Mr. Steyer and others on the left.
In reality, Mr. Steyer’s contention that the tax plan is “absolutely terrible” for working Americans couldn’t be further from the truth. The Senate bill has numerous — and underreported — provisions that offer real relief to working Americans.
The bill doubles the standard deduction to $24,000, meaning that the roughly 25 percent of American families that earn less than this threshold will pay no federal income tax at all. The tens of millions of working-class Americans who earn slightly above it will see their total tax bill significantly reduced as a result.
The Senate bill also kills the 15 percent tax rate that currently kicks in at just $18,650 of taxable family income in favor of an expanded 12 percent rate that covers earned income all the way up to $77,400.
The bill also doubles the child tax credit to $2,000 per child per year. This means the average family with children will save $2,000 to $3,000 dollars a year from this provision alone.
Taken together, these provisions would save ordinary families several thousand dollars a year. This may not be much money to some people, but it would provide overdue relief to the nearly half of all Americans who cannot cover an unexpected $400 expense, or the four-in-five working Americans who live paycheck-to-paycheck.
Such tax-cut savings could pay for that new water heater, the kids’ daycare, or gas for the car for a year — in addition to a much-needed family vacation.
Perhaps the provision that most directly counters Mr. Steyer’s “reverse Robin Hood” narrative is the new 23 percent small-business tax deduction. This tax relief would allow Main Street businesses to keep additional funds to hire, raise wages and better compete with their big-business competitors.
But the deduction is only available to businesses that earn $500,000 or less each year — making it nearly off-limits for the top 1 percent of earners who are supposedly making off like bandits. (Non-professional service small businesses, such as manufacturing firms, can still access the deduction at any earnings level.)
Mr. Steyer has it backwards: The bill provides significant relief for the middle class. Of course, the bill is still far from perfect; I hope taxes can be simplified and lowered even further in the future, to allow all Americans to keep even more of their hard-earned money.
In contrast, Mr. Steyer implies that he prefers the government to control more of the means of production. Well, anyone who believes that can donate their tax cut-inflated stock proceeds to the U.S. Treasury — not try to take away ordinary Americans’ long-awaited tax-cut earnings.
Bernie Marcus is chairman of the Marcus Foundation, co-founder of Job Creators Network and the retired co-founder of The Home Depot.