Podcast Center
Video Center
Webcasts
Resource Center
Events
November 08, 2017 at 11:40 AM
The House tax cut bill introduced last week would reduce taxes for most Americans, but at least 7% would pay more in 2018, a percentage that grows to 25% in 2027, according an analysis by the nonpartisan Tax Policy Center.
(Related: What GOP Tax Outline Means for Advisors and Clients)
The average tax bill across all income groups would decline 1.6% in 2018, saving taxpayers about $1,200 in 2018, but by 2027 the tax cut would be worth about $700, or about 0.7% of after-tax income. About 76% of taxpayers would see their taxes cut in 2018, but by 2027 that percentage declines to 59%.
The biggest beneficiaries of the bill, known as the Tax Cuts and Jobs Act (H.R.1), would be higher-income taxpayers. The top 1%, with incomes over $730,000, would collect nearly 21% of the total tax cut in 2017 and 47% of the cut in 2027, according to the Tax Policy Center.
Looked at another way, the top 1% would pay an average $37,000 less in taxes in 2018 (equivalent to an average 2.5% increase in after-tax income) and almost $53,000 less in taxes in 2027, equivalent to a 2.2% jump in after-tax income.
In contrast, the middle quintile of taxpayers by income, with incomes averaging $86,000, would receive about 14% of the tax cuts and pay $840 less in 2018, but in 2027 their share would decline to less than 9% of the tax cut, saving just $320.
