Study: GOP Tax Bill Benefits Most High Earners
The majority of Americans earning $1 million or more stand to win from the GOP’s proposed $1.4 trillion tax cut, according to a study cited by the Wall Street Journal. But while most U.S. households will get tax cuts in the near future, the effects vary within income groups — and some will see increases starting in 2023, according to the study.
In 2019, 76% of households earning $1 million or more will see tax cuts while 24% will get an increase, according to an analysis of the plan by Congress’s nonpartisan Joint Committee on Taxation cited by the Journal. Meanwhile, a separate JCT study released last week found that Americans making $1 million or more will pay $41.6 billion less in 2019, $33.4 billion less in 2021, $8.9 billion less in 2023, $21.7 billion less in 2025 and $36.6 billion less in 2027 — and that’s not taking into account the proposed repeal of the estate tax, which the committee didn’t include in its calculations, according to the paper.
Those earning between $500,000 and $1 million would get a $10.9 billion tax cut in 2019 but a $744 million increase in 2023, before getting a $2.9 billion cut in 2025 and a $7.3 billion cut in 2025, according to JCT.
Due to the complex nature of the proposed overhaul — which includes eliminations of some deductions and credits expiring over time — the effect of the tax cuts vary widely, particularly going forward 10 years, the Journal writes.
Even among those earning $1 million or more, for example, 66% would pay less in 2027 but 33% would pay more, according to JCT figures cited by the paper. Overall, 60% of households will see cuts in 2019 and just 8% would pay more, according to the new study.
But in 2027, 42% of households earning between $50,000 and $75,000 would get tax cuts of more than $500, but 24% would pay more, the study found. Households earning between $20,000 and $30,000 taken as a whole will see tax cuts through 2021 but will pay more starting in 2023, according to the study cited by the Journal.