- The Tax Policy Center released its analysis of the GOP tax bill, the Tax Cuts and Jobs Act.
- The analysis found that in 10 years, about 25% of Americans would face a higher tax burden under the legislation.
- The analysis is the second attempt for TPC, after computational errors forced a retraction of their initial analysis on Monday.
The House GOP bill to overhaul the federal tax code would result in a higher tax burden for many and skew its benefits toward wealthier Americans, according to an analysis of the legislation released Wednesday.
The analysis from the Urban Institute and Brookings Institution’s Tax Policy Center found that the Tax Cuts and Jobs Act (TCJA) would result in higher taxes for around 7% of Americans in 2018 and 25% of people in 2027.
The increase for one-fourth of Americans would come in 2027 because certain tax credits that benefit individuals would sunset then, according to the analysis. The Tax Policy Center found that much of the TCJA’s benefits would go toward wealthier Americans.
According to the analysis, in 2018 the changes to Americans’ tax bill would be:
- A cut of $US1,200 for the average American, increasing after tax income by an average of 1.6%.
- A cut of $US60 for people in the lowest quintile, increasing average incomes in the quintile by 0.4%.
- An average cut of $US800 for people in the middle quintile (individuals who make between $US48,000 and $US86,000 that year), increasing average incomes by 1.5%.
- An average $US37,000 cut for people in the top 1%, increasing average incomes by 2.5%. A total of 21% of the bill’s benefits would go to this group, the analysis said.
- 76% of people would get a tax cut, 7% would see a tax increase, and 13% would see little change.
And in 2027, the changes to Americans’ tax bills would be:
- A cut of $US700 for the average American, increasing after-tax income by an average of 0.7%.
- A $US10 cut for people in the lowest quintile, increasing average incomes by less than 0.1%.
- A $US320 cut cut for people in the middle quintile, increasing average incomes by 0.4%.
- An average $US52,780 cut for people in the top 1%, increasing average incomes by 2.2%. Nearly 50% of the bill’s total benefits would go to the 1% in 2027, the analysis said.
- 59% of taxpayers would get a tax cut in 2018, while 25% would see an increase of $US2,100 on average.
Wednesday’s analysis does not factor in any possible impact from economic growth.
The findings are similar to those from the nonpartisan Joint Committee on Taxation, a nonpartisan congressional committee, that found roughly 20% of people would pay more in 2027.
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