AP Photo/J. Scott Applewhite
Middle-class Americans will get $122.6 billion in tax cuts in 2019 under the Republican tax plan likely to win Congressional approval this week, according to an analysis released Monday by the Joint Committee on Taxation.
That means that the American middle-class will get around 47 percent of the $259.5 million in individual and business tax cuts for 2019.
Households earning between $40,000 and $200,000 make up around half of all American households, according to JCT data. Pew Research defines the American middle class for a family of three as running from $42,000 to $125,000 of pretax income. The JCT data do not break out data between $100,000 to $200,000, so its impossible to narrow the range without excluding many middle-income Americans.
The JCT data supports the Trump administration’s position that the middle-class would significantly benefit from the tax bill. Critics have said that the bill would not benefit the middle-class, an argument that the JCT data prove is false.
The very wealthy recieve a far smaller share of the tax cuts. Those earning over $1 million will receive 14 percent of the tax cuts, according to JCT data. Most of the benefit to the wealthy comes in the form of cuts to business taxes rather than individual taxes.
Many Americans wrongly expect that their taxes will increase under the Republican bill. According to the JCT, taxes for every income bracket will fall under the bill.
The JCT is required to assume that many of the tax cuts expire in future years because the tax bill sunsets them for budgetary reasons.
But Republican leaders have said they will move to extend the tax cuts or make them permanent and no Democrats have advocated for allowing the tax cuts to expire. History suggests that temporary tax cuts rarely expire on schedule, if at all. And raising taxes on middle-class households is likely to be too politically unpopular for future lawmakers to vote for it.
A Wall Street Journal article that looked at a different set of taxpayers, those earning from $20,000 up to $100,000, found this group will get 23 percent of the individual tax cuts.
Comments are closed.