Sen. Rick Scott (R-FL), who last February proposed taxing millions of low-income households who currently pay no income tax, released a new version that largely reverses those tax hikes. But while his details are even murkier than his original, Scott may still be looking to raise taxes on many of those same households. He just won’t say it.

Scott’s Rescue America 2.0, which addresses 11 areas of government policy, now says this about taxes: “Able-bodied Americans under age 60, who do not have young children or disabled dependents, should work. We need them to pull the wagon and pay taxes, not sit at home taking government money. Right now, far too many Americans who can work live off the hard work of others and don’t have their skin in the game. The government must never again incentivize people not to work by paying them more to stay home. them.

It is not possible to know what he means by “inducing people not to work”. He may be talking about refundable tax credits, direct cash assistance, or both. But most federal assistance programs for low-income people already come with work requirements.

“Steel-Toed Helmets and Shoes”

Elsewhere in the plan, he says, “This plan cuts taxes. Nothing in this plan has ever, or will ever advocate, or propose, any tax increases at all. And he promises to make the Tax Cuts and Jobs Act of 2017 (TCJA) permanent and require a congressional supermajority to raise future taxes.

To add to the confusion, Scott showed the the wall street journal (paywall) a video he made to go along with the plan. Although this video is not yet available on his website, the newspaper quoted this: “What I was trying to say is that every American has to do their part, every able-bodied American who can work should work so that we’re all in this together. As we all know, the men and women who wear steel-toed helmets and shoes are already paying more than their fair share.

Before we look at taxing these helmets, here’s the backstory: Scott originally proposed that everyone in the United States pay federal income tax. Given that about 40% of US households currently owe no federal income tax, mostly because they don’t make enough money, Scott would have effectively raised taxes on about 75 million households. Of course, almost all of them already pay other taxes, such as wages or sales.

Version 1.0

Since Scott never had a specific plan, the Tax Policy Center analyzed a proposal that might be consistent with what he was talking about last winter. TPC concluded that it would raise taxes by about $100 billion and that 80% of the burden would fall on low- and middle-income households. The average tax increase for households earning about $27,000 or less: about $900.

The Democrats were happy. Other Republicans were not at all thrilled that the chairman of their Senate campaign committee was proposing an unmarked tax hike for 75 million households.

Scott said to back down. In a succession of interviews and tweets, he insisted he never proposed a tax hike, although taxing someone who currently pays no income tax certainly looks like a raise. of tax. Then he said his idea would exempt retirees and others. He said only people who can work but would not pay his taxes. He never explained how the IRS would make such a decision.

But Scott never changed his plan. So far.

Raise taxes… or not?

What would 2.0 mean for “the men and women who wear hard hats and steel-toed shoes?” »

We don’t know exactly who Scott is talking about. But according to the Bureau of Labor Statistics, the median salary for “construction workers and helpers” was about $37,500 last year.

To put it simply, imagine a single construction worker who takes the $12,950 standard deduction this year, leaving taxable income of about $24,500. This puts that worker squarely in the 12% tax bracket. His federal income tax would be about $2,800 and his effective tax rate would be about 7.5%.

This assumes she has no children. If she is single with one child, her standard deduction is $19,400, her taxable income is about $18,000, and her federal income tax would be about $1,900. But that’s before the Child Tax Credit (CTC). Add to that, and she would become one of those non-payers that Scott is so worried about. Even though she wears a helmet and steel-toed boots.

So she doesn’t have to pay federal income tax today. She probably should have been taxed according to Scott’s original version. But would she have to pay some income tax today?

Looks like she wouldn’t, especially since Scott says he would make the TCJA permanent, including his $2,000 child credit. But what about “pull the cart and pay the taxes?” »

stop digging

Then there is the question of what “equitable share” means. Public opinion polls consistently show that a majority of taxpayers generally believe that they pay their fair share of taxes. However, they also believe that the wealthy and corporations are under-taxed.

A cardinal rule of politics is this: when you’re in a hole, the first thing to do is stop digging. Someone needs to take Senator Scott’s shovel away from him.

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