In the past, the work of the Joint Committee on Taxation has been pretty reliable. I don’t know for sure if that’s still the case, but for now I assume it is. With that caveat, here’s their estimate of who benefits the most from the Republican tax bill:
Not bad for a Republican tax bill! Still, even though they were apparently trying to avoid the “tax cut for the rich” label, they couldn’t help themselves. The benefits rise steadily with income, and millionaires get twice the cut of even the very well off. According to one member of Congress, that’s exactly what they intended:
“If you earn your income as a doctor, a lawyer, an architect, you’re not getting anything,” said Rep. Chris Collins (R., N.Y.). “But you’re not supposed to get anything—that’s how you earn your income. It wasn’t intended to lower the tax rate for a doctor, a lawyer or an architect. It was intended to lower the rate for manufacturing companies making widgets and employing other people.”
….The Tax Foundation, a conservative-leaning think tank, estimated Friday that the top 1% of households would see their after-tax incomes rise by 7.5% in 2018, compared with a 2.2% boost for the middle 20% of the population.
Translation: if you’re extremely prosperous but you perform actual labor to earn your money, then you don’t get much. But if you’re flat out rich and just invest in other people’s businesses, then ka-ching! This tax bill is meant for you. That’s why “passive” investors in businesses always qualify for the new, low rate on pass-through income, while the folks actually running the businesses don’t.
Of course, this bill is likely to change so much over the next month or two that this distribution chart will probably be out of date nearly as soon as I post it. Also, I’m curious to see if CBO arrives at the same score as JCT. I assume we’ll find out sometime next week.
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