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Republican Senator Defends Tax Bill by Citing Normal Couple Who Make $15,000 a Year Through Corporate Shelter

John Cornyn at the White House on Oct. 18.
John Cornyn at the White House on Oct. 18. Alex Wong/Getty Images

Republicans have a problem: The big tax bill they are about to vote through is unpopular, with Americans opposing its passage by an average margin of 48-32 across a number of polls. This is likely because many Americans have heard that the bill is projected to add a staggering $1.5 trillion to the deficit and that this money will go, for the most part, toward gigantic tax cuts for corporations and the rich—more of the bill’s benefits in 2018, for example, will go to the top one percent of earners than to the bottom 60 percent of earners combined.

The party’s solution to this, PR-wise, has been to try to talk about the (relatively meager) benefits that the middle class will get from the bill instead of the breaks for high earners that comprise the majority of its price tag. This seems to be what Texas Sen. John Cornyn, the Senate’s majority whip, was attempting to do when he or his social media staff came up with whatever this is:

Folks, I’m not some sort of money scientist; as far as taxes, I pay a guy named Ed to do mine and usually don’t think much more about the subject. But I did run Cornyn’s tweet by Slate economics correspondent Jordan Weissmann, who was as perplexed as I was by the idea of a family having both a non-corporate business (plausible—could be, say, a landscaping company) and a chunk of separate and ostensibly corporate “business income.” His best guess was that the $15,000 in Cornyn’s hypothetical refers to income from an “S-corp” created in order to avoid self-employment tax.

It’s not an example, in other words, that really screams “Jane and Joe Sixpack”—the Tax Policy Center estimated in May, for example, that fewer than five percent of households in the middle income quintile would be affected by a reduction to taxes on “pass-through” businesses like S-corps. (The TPC said “more than three-fifths” of households in the top 0.1 percent would benefit, though.) In any case, the actual average tax cut under the GOP bill in 2018 for households in that middle quintile—the literal middle class—will be $980, a gain which could be offset by the cuts to federal retirement and health spending which Republicans now argue they must impose because the deficit is getting too big. (I promise that’s not an exaggeration of what they’re saying—read the article.) For the top one percent of earners, by contrast, the average cut next year will be $51,000. It’s good to be rich!

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