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The Penn Wharton Budget Model, a nonpartisan research initiative by the University of Pennsylvania’s Wharton School, recently published mini-guides outlining candidates’ policy proposals and their respective fiscal effects and consequences for the U.S. economy.

One of these guides focused on President Donald Trump’s proposed capital gains and dividend tax cut.

PWBM estimates that reducing the top preferential rates on capital gains and dividends from 20% to 15%, an intention confirmed by National Economic Council director Larry Kudlow in August, will cost $98.6 billion over the 10-year budget window.

This tax cut will benefit only tax units in the 5% of the income distribution, with 75% of the benefit accruing to those in the top 0.1% of the income distribution.

According to PWBM, the tax brackets that set the tax rates for capital gains and dividends are determined by level of taxable income.

For purposes of the analysis, “capital gains income” refers to income from assets held for more than a year, which qualifies for preferential treatment, versus from assets held for less than a year, which is included in ordinary income and taxed at ordinary rates.

Under current law, no tax is owed on capital gains or dividend income if taxable income is below $40,000 for single filers and $80,000 for joint filers. Filers with taxable income between $40,000 ($80,000) and $441,450 ($496,600) face a 15% rate, rising to a 20% rate for income above that amount.

The White House plan eliminates the top bracket under current law. Filers with taxable income of more than $441,450 ($496,600) would pay the 15% rate on capital gains and dividend income.

PWBM modeled this scenario as a permanent rate cut set to begin in 2021. It estimated that the fiscal year budgetary changes resulting from the rate cut would reduce federal revenues by $98.6 billion over the 2021–2030 budget window.