Trump Tax Plan Robs from the Poor to Give to the Rich


Reverse Robin Hood:

Trump Tax Plan Robs from the Poor to Give to the Rich

Data and text from the non-partisan Congressional Budget Office (CBO) [Editor’s notes in brackets]

https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/reconciliationrecommendationssfc.pdf

The combined distributional effect of the provisions estimated by …CBO, thus representing the total distributional effect of the bill, was calculated by subtracting the estimated change in federal spending from the change in federal revenues allocated to each income group. The resulting changes …allocated to each income group are reflected in the following table. A decrease in federal deficits, such as an increase in taxes or a decrease in spending [transfer payments to the income category; italics added-Ed.], is shown as a positive value. An increase in federal deficits, such as a decrease in taxes or an increase in spending, is shown as a negative value. [Note; The median family income in the US is in the $50,000 range, so these figures show that the average taxpayer will lose under this bill by no later than 2027, with those poorer than average showing the largest costs or losses soonest.-Ed.]

Allocation of Changes in Net Federal Revenues and Spending Under the Tax Cuts and Jobs Act in Millions of Dollars [Emphasis added.-Ed.]

Income Category                      2019             2021                2023            2025                    2027

Less than $10,000              1,540[*]           5,870               7,440            8,680                  10,070

$10,000 to $20,000                960           9,050              11,400             12,180                  16,060

$20,000 to $30,000                  80          9,000              10,200             12,210                 16,720

$30,000 to $40,000            -3,920               770              2,440               2,560                   7,610

$40,000 to $50,000            -6,040           -2,660           -1,800            -1,530                   5,270

$50,000 to $75,000            -22,270        -19,470          -16,940          -17,380                  3,980

$75,000 to $100,000           -21,520        -21,260         -18,470           -19,540                -1,390

$100,000 to $200,000    -64,240           -63,990          -52,900           -55,470               -5,340

$200,000 to $500,000    -59,570          -60,110           -50,010           -54,530                -5,190

$500,000 to $1,000,000 -24,880        -24,080           -18,690           -20,000               -1,940

$1,000,000 and over           -34,100      -28,690            -13,100            -15,810               -5,780

Total, All Taxpayers          -233,950      -195,570        -140,400          -148,620               40,110

Source: Staff of the Joint Committee on Taxation and the Congressional Budget Office.

[* – This means the poorest people in the US would suffer $1.5 billion in lost revenue and/or increased taxes in the first year alone!-Ed.]

Amounts are for calendar years and exclude effects of several provisions, including doubling the exemption allowed under estate and gift taxes. [Italics added.–Ed.]

Overall, the combined effect of the change in net federal revenues and spending is to decrease deficits (primarily stemming from reductions in spending) allocated to lower-income tax filing units and to increase deficits (primarily stemming from reductions in taxes) allocated to higher-income tax filing units. [Emphasis added.-Ed.]

Those effects do not incorporate any estimates of the budgetary effects of any macroeconomic changes that would stem from the proposal. Because of the magnitude of its estimated budgetary effects, the Tax Cuts and Jobs Act is considered major legislation…. It therefore triggers the requirement that the cost estimate, to the greatest extent practicable, include the budgetary impact of the bill’s macroeconomic effects. The staff of the Joint Committee on Taxation is currently analyzing changes in economic output, employment, capital stock, and other macroeconomic variables resulting from the bill for purposes of determining these budgetary effects. However, JCT indicates that it is not practicable for a macroeconomic analysis to incorporate the full effects of all of the provisions in the bill, including interactions between these provisions, within the very short time available between completion of the bill and the filing of the committee report. [Note: Independent economic analyses predict the bill would result in job loss and disinvestment in the US.-Ed.]

 

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