GOP tax bill would increase taxes on 28% of Americans by 2027: Study

Tax Reform FOXBusiness

Majority of Americans will get a tax cut under new House bill: Rep. Noem

Rep. Kristi Noem (R-SD) discusses the latest House GOP tax reform legislation.

The GOP’s Tax Cut and Jobs Act would reduce taxes across all income groups on average next year, but in 10 years more than one-quarter of Americans would experience an increase in taxes, a new study showed.

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According to a new analysis by the Tax Policy Center, overall average after-tax income would increase by 1.5% next year if the Republican tax bill passes in its current form. However, a little more than 12% of taxpayers would owe more in 2018. In 2027, 28% of Americans would experience a tax increase when compared with the current law.

The study also showed that the highest benefits would accrue for the wealthiest Americans.

Those with incomes under $48,000 could expect to receive tax cuts between 0.3% and 0.5% of after-tax income next year, the Tax Policy Center found. Those with average incomes between $48,000 and $86,000 would receive a tax cut worth 1.2% of after-tax income, or about $700. The top 1% of American taxpayers, or those with incomes in excess of $730,000, would receive 22% of the total tax break with an average cut of $37,000, or 2.5% of after-tax income.

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By 2027, taxpayers could expect their tax cuts to shrink to about $700 on average as provisions in the bill expire.

On Thursday, the Republican Party unveiled the details of its long-awaited legislation, which it claimed would save the average middle-income family of four $1,182. The GOP proposed collapsing the current seven-tier bracket system into just four: 12%, 25%, 35% and 39.6%. The highest rate is in line with the current top tax rate, but kicks in at an income level of $1 million for married couples. Currently the top rate applies to those with incomes in excess of $470,700.

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Additionally, the plan would leave retirement plans untouched, lower the corporate tax rate by 15 percentage points and phase out the estate tax over the course of six years.

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