Analysis finds wealthy benefits under House GOP tax bill
WASHINGTON » The wealthiest Americans would benefit from the largest tax cuts under the House Republican overhaul, according to a nonpartisan analysis that stoked the incendiary debate over whether the GOP bill truly helps the middle class.
The Tax Policy Center on Monday found that in 2018, when the legislation pushed by President Donald Trump and Republican leaders would first take effect, 12 percent of people would see their tax bills rise. Next year, the average tax cut would be $1,100 under the legislation, but the amount would vary by income.
People earning less than $48,000 annually would see tax cuts of 0.5 percent or less of their after-tax income. The top 1 percent of earners — people making over $730,000 — would get an average cut of 2.5 percent, or $37,000.
In 2027, people making below $55,000 would get average tax boosts, not cuts. But the top 1 percent making over $912,000 would see average cuts of nearly $53,000, a 2.2 percent reduction.
The report came as the tax-writing Ways and Means Committee kicked off a marathon session to amend and vote on the far-reaching legislation that Trump hopes to sign into law by year’s end. The panel’s Republicans and Democrats bickered heatedly over the impact of the legislation.
Republicans focused on findings by Congress’ nonpartisan Joint Committee on Taxation that the bill would lower taxes across all income levels over the next several years.
“Clearly this is helping real people. It’s helping teachers, it’s helping students, it’s helping struggling families that are living paycheck to paycheck,” said GOP Rep. Erik Paulsen of Minnesota.
Democrats returned repeatedly to a section of the analysis showing taxes would actually go up beginning in 2023 for some 38 million taxpayers or families making $20,000 to $40,000 a year.
“There are a lot of people expecting a tax cut who would be big losers under this bill,” proclaimed Democratic Rep. Bill Pascrell of New Jersey. “This is a joke and you’ve got to face up to it.”
At stake is whether the GOP will succeed in passing the most sweeping rewrite of the tax code in decades, which would be a major achievement for congressional Republicans and Trump after a year largely devoid of legislative wins. And looking ahead to 2018 midterms where Democrats will aim to wrest back control of the House from the GOP, each side is trying to win the political debate over who is truly looking out for middle-class Americans.
The legislation adds $1.5 trillion to the ballooning national debt, delivers a major tax cut to corporations, and repeals the estate tax, which would benefit a tiny percentage of the wealthiest families in the country. It also simplifies the loophole-ridden tax code by collapsing today’s seven personal income tax brackets into four, nearly doubles the standard deduction used by people who don’t itemize, and increases the child tax credit, an element championed by first daughter Ivanka Trump.