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Taxes on Workers Earning Less Than $75K Could Rise Under GOP Plan

The GOP's tax overhaul proposal is projected to increase the national deficit by $1.5 trillion. (Pixabay)
The GOP's tax overhaul proposal is projected to increase the national deficit by $1.5 trillion. (Pixabay)
November 24, 2017

DENVER -- The U.S. Senate could vote on its version of the GOP tax bill as early as next week, but labor groups are not convinced the plan is in the best interests of working families.

Dennis Dougherty, executive director at the Colorado AFL-CIO, said the wealthiest 1 percent of Americans would get 80 percent of the proposed tax benefits. Citing analysis from the nonpartisan Joint Committee on Taxation, Dougherty said workers who earn less than $75,000 a year will see their taxes go up.

"So the congressional Republican tax plan will make hard-working Coloradans pay for a massive tax giveaway for big business at a time that corporations are posting record profits,” Dougherty said. "That's totally backward."

He said if the Senate's bill matches the one passed by the House, 415,000 Colorado taxpayers - the bottom 80 percent of earners - will end up paying more in taxes when the plan is fully phased in.

Proponents of the plan have claimed that by cutting taxes on corporations and the wealthy, that money will make its way to workers through increased wages.

According to the Economic Policy Institute, wages for the majority of Americans haven't stalled because of high corporate tax rates but because of policies that have eroded workers' bargaining power. Dougherty also said he's concerned that the plan does nothing to prevent corporations from stockpiling profits in foreign tax havens, and could lead to more jobs shipped overseas.

"It's going to give huge tax breaks to corporations that outsource jobs,” he said. "The U.S. tax rate on most offshore profits would be reduced to zero, giving corporations more incentives to move jobs offshore."

Dougherty argued a tax plan that would help working families will require Wall Street and the wealthy to pay their fair share, and then put that money to work by repairing the nation's infrastructure and investing in education and other needs.

Eric Galatas, Public News Service - CO