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Local economist talks impact of senate tax bill

Posted at 6:30 PM, Dec 02, 2017

KANSAS CITY, Mo. -- The Senate narrowly passed Republicans' tax reform bill early Saturday morning following a marathon voting session overnight. 

The bill, approved in a 51-49 vote, received no Democratic support and has many talking about what that means for the future. 

Dr. Bill Black, an Economics and Law Professor at the University of Missouri Kansas City, says the Senate tax bill clearly benefits the wealthy while creating a lesser-known victim in the process.

The 479-page tax bill isn’t in its final form yet, it still has to go to a conference committee that will make changes.

“None of this is going to become legislation exactly as we see it,” said Black.

But at this point, Black says there is some clarity needed on the impact it will have on Americans.

The bill contains both permanent and temporary changes.

“The permanent giant change is an enormous reduction in the corporate tax. The benefit will go almost exclusively to very wealthy people,” said Black.

That change is not sitting well with some people. Protesters took to Capitol Hill on Saturday to make their frustration known.

“Want to know who will reap the benefits under this plan? Ultra-wealthy individuals and corporations who aren’t hanging on by a thread,” said one protester.

Black says taxes for most middle-class Americans will decrease.

“When you start out, some middle-class people will have a tax increase, most will have a tax decrease,” said Black.

But that is a temporary change and will be eliminated down the line.

“By 2025 when the temporary stuff goes away that will switch and most middle-class people will experience a tax increase under this bill,” said Black.

A less obvious concern, according to Black, is just how much will be added to the deficit and more specifically, how that will impact government programs in the future.

"The trouble is going to be out years when they use this argument 'oh we blew up the deficit we have to cut food stamps right. We have to cut social security. Those are the true victims you are going to see,” said Black.

The bill will also repeal the individual mandate from the Affordable Care Act. The individual mandate creates penalties for many who do not have health insurance. The repeal will leave 13 million Americans uninsured.

The bill now goes to conference where House and Senate negotiators will resolve differences between their tax bills before a final version is sent to President Trump.