An important fiscal conservative group on Tuesday criticized the House Republican tax bill and said one of its provisions in particular is an example of “class warfare.” “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,” Club for Growth President David McIntosh said of the bill in a statement.
In particular, McIntosh criticized the bill for retaining the top 39.6 percent individual tax rate for individuals making $1 million, calling it “class warfare the likes of which would make Democrats green with envy.”
He faulted several other features of the bill, including a “bubble” tax bracket for some people who would see marginal tax rates of higher than 39.6 percent over a range of income because the bill would claw back the benefits of the bottom tax bracket being lowered to 12 percent. He also criticized it for phasing out the estate tax rather than immediately eliminating it, and for including restrictive rules on which partnerships, sole proprietorships, and S-corporations can access the new special 25 percent business tax rate for non-C-corporations.
The Club for Growth’s bad review of the bill stood out from most other conservative groups, which have aligned behind the House GOP as it seeks to push a major rewrite of the tax code through the Ways and Means Committee this week.
The bill has received mostly positive reviews from outside free-market groups. But early opposition has come from interest groups like the National Association of Realtors and the National Association of Home Builders, who have raised concerns about the proposed reduction in tax deductions and other breaks for housing.
Ways and Means Committee Chairman Kevin Brady, the bill’s author, has defended keeping the top 39.6 percent rate as necessary to ensure that the bill contains enough tax breaks for middle-class households.
