The Senate Tax Bill Favors the Middle Class, Not the Rich

 

 

(From The National Review)

So I recalculated the JCT results, and found that middle-income groups would get by far the largest cuts as a percentage of current income taxes. For example, households earning between $50,000 and $75,000 would get a 24 percent cut in 2019, while those over $1 million would get just a 6 percent cut.

What about the Tax Foundation? The foundation has done yeoman’s work on tax reform, generating timely runs of its simulation model and supporting pro-growth reforms. But even its reports hide the GOP’s big cuts for middle earners because it, like the TPC, shows tax cuts as a percentage of after-tax incomes. Tax Foundation reports that the Senate cuts would increase incomes 4 to 5 percent across the board including the economic-growth effects, suggesting that the cuts are equitable.

But they are not. To see why, consider that the top 1 percent earns 21 percent of all income but currently pays 39 percent of all individual income taxes. As a result, a tax cut that reduced every taxpayer’s burden by the same exact proportion — say, a quarter — would boost after-tax income by a higher percentage for the rich, simply because the rich pay a higher percentage of their income in taxes to begin with. For middle and lower earners, the opposite statistical effect occurs.

Click here for the article.

Contact Us
You have 0 items in your cart. Proceed to checkout?
Yes, please!