- "We're going to give the American people a huge tax cut for Christmas," President Donald Trump said Monday, speaking before a cabinet meeting
- But a nonpartisan tax analysis group said the Senate package would leave half of taxpayers facing higher levies by 2027
- The group also said the proposal would generate enough growth to produce additional revenue of $169 billion over a decade
- That number falls far short of the $1.5 trillion estimate over the same period by Congress' Joint Committee on Taxation
President Donald Trump on Monday promised a tax overhaul by Christmas, even as a nonpartisan tax analysis group said the Senate package would leave half of taxpayers facing higher by 2027.
Trump spoke as the Tax Policy Center said that while all income groups would see tax reductions, on average, under the Senate bill in 2019, 9 percent of taxpayers would pay higher taxes that year than under current law. By 2027, that proportion would grow to 50 percent, largely because the legislation's personal tax cuts expire in 2026, which Republicans did to curb budget deficits the bill would create.
The policy center, a joint operation of the liberal-leaning Urban Institute and Brookings Institution, found that low-earners would generally get smaller tax breaks than higher-income people.
In 2019, those making less than $25,000 would get an average $50 tax reduction, or 0.3 percent of their after-tax income. Middle-income earners would get average cuts of $850, while people making at least $746,000 would get average cuts of $34,000, or 2.2 percent of income.
The center also said the Senate proposal would generate enough economic growth to produce additional revenue of $169 billion over a decade. That's far short of closing the near $1.5 trillion in red ink that Congress' nonpartisan Joint Committee on Taxation has estimated the bill would produce over that period.
The House approved a tax measure Thursday slicing corporate and personal taxes by $1.5 trillion over the coming decade. That evening, the Senate Finance Committee approved a similar plan, which like the House version devotes the bulk of its reductions to corporations and other businesses.
The Senate bill would repeal a requirement that Americans have health insurance or pay a fine. The provision is not in the version of the tax overhaul passed last week by the House.
Striking the health care provision might satisfy some GOP moderates who oppose repealing the language, but would also blow a hole in the senators' tax cut plan, leaving them $338 billion short of their revenue goal over the next 10 years.
Reference: CNBC
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