- The House GOP released their long-awaited tax reform package on Thursday.
- The Committee for a Responsible Federal Budget found that of the $US1.5 trillion in net direct benefits, corporations would receive $US1 trillion and individuals would receive $US500 billion.
- The analysis said that of the $US500 billion in benefits to individuals, nearly $US200 billion of that would come from changes to the estate tax.
The big winners from the House GOP tax reform bill released Thursday would likely be big corporations and wealthy heirs, according to an early analysis of its provisions.
The Committee for a Responsible Federal Budget released a summary of the Tax Cuts and Jobs Act (TCJA), soon after its release on Thursday, breaking down who would get their tax bill reduced and by how much.
According to the CRFB’s summary of the bill’s total direct effects over 10 years, most of the benefits would go to large corporations.
Those firms would see their statutory tax rates drop to 20% from the current 35% under the plan, and they could expense business investment immediately. According to the analysis, corporations would receive $US2.2 trillion total in tax cuts and benefits while losing roughly $US1.2 trillion in closed loopholes and deductions.
Comparatively, individuals would see benefits of $US3.3 trillion from the updated tax brackets and increased standard deduction. That massive benefit, however, would be offset by $US3 trillion in lost deductions, exemptions, and credits. So the total direct benefit to average Americans would be about $US300 billion over 10 years. The analysis doesn’t account for which income levels and groups would benefit more or less than others.
The tax bill, according to CRFB, would also be a huge boon for heirs of large estates. The TCJA would increase the threshold for the estate tax to more than $US11 million immediately and phase the tax out after six years. The total benefit from the repeal: $US172 billion.
Those figures don’t include benefits that could be passed down from corporations in the form of higher wages or increased economic growth, a source of debate among economists.
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