aside The Truth About President’s Tax Cuts’ Proposal As Per Tax Policy Center’s Analysis

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GARY COHN/ STEVEN MNUCHIN

Here’s the rest of the story…

On September 29, 2017, Jim Puzzanghera of the LA Times penned the following report, “GOP tax plan would benefit super-rich the most, slightly raise taxes on upper earners, analysis finds.”

Excerpts:

“The Republican tax plan would give the biggest benefit to the super-rich in coming years — and slightly raise upper earners’ taxes while reducing them for everyone else, according to an analysis released Friday (9/29/17) by a nonpartisan think tank.”

“The sweeping tax changes, which include slashing the corporate rate and lowering the top individual rate, also would increase the federal budget deficit by $2.4 trillion over the first decade and $3.2 trillion over the next one, according to the (Tax Policy Center’s) analysis.”

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“The findings by the Tax Policy Center contradict assertions by the White House and congressional Republicans that the plan unveiled this week would not benefit the wealthy — including Trump himself.”

“In 2018, the average tax bill for all income groups would decline,” the analysis said. “Taxpayers in the top 1% (incomes above $730,000) would receive about 50% of the total tax benefit; their after-tax income would increase an average of 8.5%.”

“Middle-income households would see a 1.2% increase in their after-tax income in 2018. Upper earners — those with annual incomes between about $150,000 and $308,000 — would see their after-tax income increase by about 0.75%.”

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“But because of changes in the tax plan to how brackets and other benefits are indexed for inflation, the effects of the tax cuts would lessen over time for most people — but not the super-rich.”

“In 2027, middle-income households would see a 0.5% increase in after-tax income compared with 2018. But upper earners would see their after-tax income decline by about 0.35%.”

“The top 1% of earners would do better in 2027, with the plan increasing their after-tax income by 8.7%. That’s a whopping 80% of the total tax benefit.”

“But within even those breakdowns, which are averages, there also are winners and losers. In 2027, about 10% of poor households would see tax increases. About 30% of middle-income households and about 60% of upper-income earners would see their taxes go up.”

“Just 10% of those with incomes over $912,000 in 2027 would see a tax increase, the study said.”

“The preliminary study is based on assumptions about crucial details the Republican tax overhaul has yet to spell out, including income levels for new tax brackets.”

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“The analysis also doesn’t factor in the effects of increased economic growth from the plan, which Republicans are counting on to offset the tax cuts. Tax Policy Center analysts said those calculations take longer, but they are not expecting significant changes to their estimates based on their previous analysis of similar plans from Trump and House Republicans.”

“Rep. Kevin Brady (R-Texas), who helped draft the party’s tax plan, blasted the analysis as “misleading, unfounded, and biased” and said it made “a variety of overreaching and unrealistic assumptions about policy decisions members of Congress still have to make.”

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“Republicans are unified in delivering tax reform that will lower taxes on middle-class Americans, ensure they are able to keep more of their hard-earned money, and grow our economy,” he said.”

But Sen. Ron Wyden (D-Ore.) said the think tank’s analysis showed that Republicans “are executing a middle-class con job.”

“While this administration continues to peddle false claim after false claim, nothing can hide the truth that the only individuals getting a windfall from this plan are the president, his family and his high-flier friends,” Wyden said.”

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“The centerpiece of the Republican plan is reducing the corporate tax rate to 20% from the current 35%, which is the highest in the industrialized world.”

“Republicans also want to reduce the taxes paid by so-called pass-through businesses, such as partnerships, which pay through the individual tax code. The highest individual rate right now is 39.6%. The Republican plan would set a maximum tax of 25% on such businesses.”

“The Tax Policy Center said those changes skew the plan toward helping businesses instead of individual taxpayers. The business provisions would reduce federal tax revenue by $2.6 trillion during the first 10 years.”

Image result for cartoons on trumps tax cuts proposal“The changes in the individual tax code, which include nearly doubling the standard deduction and eliminating personal exemptions, would increase federal tax revenue by about $470 billion during that same period.”

Tax Policy Center experts said their breakdown of the plan’s benefits could change depending on decisions of lawmakers working to turn the outline into legislation.

“Although the plan reduces the top individual rate to 35% from 39.6%, Republicans have said they might add a new top bracket above 35% if needed to make sure the tax code remains as progressive as it now is.”

Image result for cartoons on trumps tax cuts proposal“The plan reduces the seven current individual tax brackets to three: 12%, 25% and 35%. The Tax Policy Center assumed that income now assigned to a 33% bracket would be shifted up into the 35% bracket, which would hurt upper earners.”

“If that income is shifted down to the 25% bracket, those people would benefit — but the plan’s cost would increase.”

“Upper-income households are hurt by the plan’s elimination of the deduction for state and local taxes, which would hit particularly hard in California and other high-income, high-tax states.”

5 comments

    • Dear Suzanne,

      I’ll be blogging a lot on this issue. That a family of four with an income of $100.000 would save about $1000.00 doesn’t excite me. We all know that this is a tax cut for the rich that we can ill afford especially if we want to do major infrastructure spending.

      Thanks a million times over for all of your support and for these reblog.

      Hugs, Gronda

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