Last week, House Republicans unveiled their partisan tax reform framework that will cut taxes for the wealthy while leaving the middle class behind and exploding the deficit. Here’s a look at what their proposal would really mean for the American people:
According to an analysis by the Tax Policy Center, 80% of tax cuts in the Republican framework would go to wealthy Americans with incomes over $900,000 a year.
The wealthiest Americans – those who make at least $5 million a year and earn $16 million per year on average – would get an average tax cut of over $1 million dollars, compared to a $50 tax cut for the lowest-income Americans.
The wealthiest Americans would see a 10% increase in their after-tax income, while take-home pay for lower- and middle-income taxpayers barely moves at all, increasing by just 0.5% or less.
Only 3% of the wealthiest Americans will see a tax increase, while roughly a third of middle-income taxpayers will see their taxes go up.
The story is even worse for families. Nearly half – 44.5% – of all taxpayers with children will see a tax increase.
Lower-income families are much more likely to see a tax increase than very wealthy families. For example, 40% of families earning less than $20,200 a year would see their taxes go up, while less than 4% of the wealthiest Americans with children would receive a tax increase.
Families with children are much more likely to see a tax increase than taxpayers without children with the same income.
When you take into account whether or not a taxpayer has children, the distribution of tax cuts is even more skewed toward wealthy Americans. Many lower-income and middle-class families will see a tax increase while the wealthiest Americans – a mere 50,000 taxpayers whose incomes average over $17 million per year – will get an average tax cut of $1 million.
Republicans’ partisan tax reform plan does not reform our tax code. Instead, it cuts taxes on the wealthy at the expense of lower-income and middle-class families and balloons the deficit. The GOP ought to abandon this framework and work with Democrats on bipartisan reform that is revenue neutral.
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