The Republican Tax Plan Scam

Oct 7, 2017

Under the tax plan being floated by Republicans two big changes would occur with how the government adjusts for inflation. Republicans are proposing doing away with the personal exemption which is indexed to inflation. It would be “partially” replaced “with a bigger Child Tax Credit,” which is currently not indexed to inflation. A bigger Child Tax Credit would initially help families, but “inflation would erode the additional benefit over time.” The other big change in the plan is the way in which inflation is measured for the tax code. The code currently used the Consumer Price Index. Under the Republican plan, the CPI would be replaced with chained CPI. This method “is consistently lower than traditional CPI.” The government would raise more in taxes under the adjustments and taxpayers would be left with less money over time. “It would especially hit low- and moderate-income households that rely on the Earned Income Tax Credit and standard deduction, but it would affect all taxpayers in some way.”