The rich to benefit most from Republican tax cut bill: analysis

Source:Xinhua Published: 2017/11/9 11:23:54

Rich people will benefit most from the Republican tax cut bill, with some middle class families paying more tax, said a highly-regarded Washington think tank Wednesday.

"The largest cuts, in dollars and as a percentage of after-tax income, would accrue to higher-income households," said Tax Policy Center in a report analyzing the distributional effects of the Tax Cuts and Jobs Act introduced by the Republicans of the US House of Representatives on Nov. 3.

In 2018, taxpayers in the bottom income quintile (those with income less than 25,000 dollars) would see modest tax cut of 0.4 percent of after-tax income, according to the analysis.

Taxpayers in the middle income quintile (those with income between about 48,000 dollars and 86,000 dollars) would receive an average cut of 1.5 percent of after-tax incomes.

Taxpayers in the top 1 percent (those with income more than 730,000dollars) would receive nearly 21 percent of the total tax cut: an average cut of about 37,000 dollars, or 2.5 percent of after-tax income.

The effects of tax cut would decrease over time as some tax credits are scheduled to expire. In 2027, the overall average tax cut would be smaller than in 2018, the analysis shows. The rich, however, would gain more share of the tax cut benefit, with taxpayers in the top 1 percent receiving nearly 50 percent of the total benefit.

Besides, the analysis also finds that some people would pay more tax under the current tax cut bill. "Not all taxpayers would receive a tax cut under this proposal -- at least 7 percent of taxpayers would pay higher taxes under the proposal in 2018 and at least 25 percent of taxpayers would pay more in 2027," said the report.

"By 2027, about 31 percent of middle-income households would pay an average of 1,150 dollars more in taxes than under current law," said Howard Gleckman, a senior fellow with TPC.

The rich people would also benefit from the bill's proposed business tax cuts -- both for corporations and for pass-throughs such as partnerships, the analysis shows.

The Republican tax cut bill is now under review in the House Ways and Means Committee. The republicans in the House want to pass the bill by Thanksgiving.

Posted in: AMERICAS

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