On Thursday, the independent Joint Committee on Taxation (JTC) announced that the Senate tax bill will not generate enough growth to counterbalance the $1.4 trillion worth of tax cuts it includes — adding $1 trillion to deficit over 10 years.
Many Americans still remain uncertain about how the bill will impact them, personally, but one thing can be known for sure: Recent college graduates will certainly be affected.
According to a report released Sunday by the bi-partisan Congressional Budget Office (CBO) "tax units" — either a family or an individual taxpayer — of this bracket will be negatively impacted by the Senate bill. Their figures consider how individuals' tax bills will change, as well as how the benefits and services they currently receive — like Medicare and Medicaid — will be adjusted.
Source: Source: CBO
According to the CBO's calculations from Sunday, taxpayers in the $30,000 to $40,000 tax bracket will record a net loss — meaning they'll pay more in taxes, experience diminished services, or both — every year starting in 2021.
In 2019, they will experience a $244.83 benefit, but in 2021, they will see a $48.37 loss. By 2027, they will bear a $467.93 loss. The Senate tax plan also includes a significant corporate tax cut and huge benefits for those making over $100,000 a year.
Republicans argue that these measures will lead to wage increases for middle and lower-income Americans, like recent college graduates, and that a rise in wages will offset the negative impacts of the bill. But many economists maintain that tax cuts for corporations and the wealthy do not trickle down into real wage increases for workers.
Democrats introduced an amendment to the bill that would require companies receiving tax cuts from this bill to increase worker wages by the same percentages as they do for their executives. But according to Senator Dianne Feinstein, the Republicans who voted on this amendment opposed it.
Senate Majority Leader Mitch McConnell says that Republicans have secured enough support to pass the bill, telling reporters Friday, "We have the votes."
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