- Thomson Reuters
- Households making between $200,000 and $500,000 could be the biggest “losers” of the Senate Republicans’ tax reform plan.
- About a quarter of those households would pay more in 2019.
- Fewer households with income over $1 million would pay more – of those, only 18% would see a tax increase in 2019.
The massive bill is moving through Congress quickly, but the House bill’s passage is just another in a series of steps for it.
Senate Republicans debuted their own tax legislation as well, and it contains some substantial departures from the House’s version. If the Senate is able to pass its version of the bill, House and Senate members will have to come together on a conference committee to agree on a compromise bill. That bill would then need to be approved by both chambers before heading to Trump’s desk.
In the mean time, the nonpartisan Joint Committee on Taxation found that people who earn between $200,000 and $500,000 would see the most tax increases under the Senate’s proposal, according to the Wall Street Journal.
About a quarter of households earning an income in that range would pay more in 2019 under the plan, the committee said. And one in three would get a tax increase by 2023. Fewer households with income over $1 million would end up paying more under the proposal – only 18% would see a tax increase, while 82% would get a tax cut.
Overall, every income group gets a tax cut under this plan, but there is some variation within the brackets. The Joint Committee on Taxation said that over half of US households would get a tax cut in 2019 under the Senate’s plan, about 9% would see a tax increase, and the rest would see a change of less than $100.
The Joint Committee on Taxation’s assessment doesn’t factor in the estate tax, the WSJ said.
Unlike the House’s version, the Senate bill proposes delaying the massive corporate tax rate cut until 2019, keeping the number of individual tax brackets at seven, and eliminating the state and local tax deduction completely.
Both of the House and Senate’s plans propose eliminating the personal exemption and increasing the standard deduction.