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Report finds GOP tax plan benefits top 1%

30 September 2017

The analysis shows that the elimination of state and local tax deductibility will mean that 3.3 million NY taxpayers would see their federal income tax liability increase by $17.5 billion.

According to the governor, existing Federal law that allows taxpayers to deduct their state and local taxes from their federal taxable income has been the law of the land since the Revenue Act of 1862, which created the country's first income tax.

The GOP tax framework unveiled this week would spread tax cuts across all income groups, with the richest Americans seeing the biggest windfall. The Tax Policy Center analysis does not include the plan's potential impact on economic growth, which Republicans have said will help pay for the tax cuts. That includes more than a third of taxpayers making between about $150,000 and $300,000, mostly because of the elimination of many itemized deductions.

The plan would cost $2.4 trillion over 10 years.

Much about the proposed tax plan has yet to be finalized, including the income cutoffs for three new tax brackets that will replace the current seven marginal rates.

The plan being touted by President Donald Trump as the biggest tax cut ever delivers 50 percent of its total tax benefit to taxpayers in the top 1 percent, those with incomes above $730,000 a year, according to the Tax Policy Center of the Urban Institute and Brookings Institution. Corporations would see some $2.6 trillion in tax savings over a decade while individual taxpayers would get $470 billion.

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The top 1% would benefit far more than everyone else.

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"The largest benefits, in dollar and percentage terms, would go to the highest-income households". By 2027, 60 percent of them would see their taxes rise by about $4,000, according to the tax center. While those making less than about $150,000 would get an average tax cut of 0.5 percent or less, those making between $150,000 and $300,000 would pay, on average, $800 more.

Some key technology firms and Washington trade organizations have come out in support of the Republican Party's tax plan that was released earlier this week, reports The Hill.

The bottom 99 percent of taxpayers would see their federal tax rates drop 0.4 to 1.7 percentage points on average next year. In addition, tax brackets would be indexed to a slower measure of inflation, meaning that by 2027, more income would be taxed at higher rates.

Taken together, the center estimates that the proposal would cost the Treasury roughly by $2.4 trillion over the first 10 years and $3.2 trillion over the following decade.

Report finds GOP tax plan benefits top 1%