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- The Joint Committee on Taxation released a new report on the Tax Cuts and Jobs Act. The analysis found that while the TCJA would lower taxes for most people, nearly 20% of Americans would see a tax increase by 2027. The report laid out that the TCJA would create a distinct set of winner and losers.
The House GOP tax plan would result in a tax increase for nearly one out of five Americans by 2027, according to a new report from the Joint Committee on Taxation.
The JCT, the official nonpartisan congressional researcher of legislation, determined that the Tax Cuts and Jobs Act (TCJA) would increase taxes by more than $500 for 14.3% of people making between $50,000 and $75,000 in 2027.
The report also said the legislation would raise taxes between $100 and $500 for 9.4% of households in that income bracket. On the other hand, roughly 66% of people would see a tax cut of $100 or more and 16.3% would see little change either way.
Republicans have argued that their tax bill would not negatively affect the middle class. But the JCT analysis found that a sizeable chunk, 23.7% of people making $50,000 to $75,000, would see an increase to their tax bills in 10 years.
The breakdown for the wealthiest Americans – those making $1 million or more annually – would be more extreme on either end. Overall, according to the analysis, 66.1% of those people would get a tax cut of $500 or more, while 32.9% would see a tax increase of $500 or more. Only 0.9% of people in the bracket would see no change or a change of less than $500 either way.
While the JCT report shows that individuals would receive more substantial tax breaks in the early years of the bill, the expected sunset of some of the biggest benefits for families after a few years – such as the additional-dependent credit – would eventually lead to the benefits disappearing.
For instance, in 2019, 75.1% of people making from $75,000 to $100,000 that year would get a tax cut of more than $500. By 2027, however, that number would shrink to 50.6%. At the same time, the number of people in that bracket who would get a tax increase of $500 or more from the current bill would plummet from 7.8% to 18.3%.
In a separate analysis, the JCT found that the average person at each income level would receive a benefit from the TCJA but the new report shows that there would be distinct winners and losers from the bill.