By DEVON ST. CLAIRE
The Senate tax bill tends to be viewed very differently by Republicans and Democrats of what the latest version of the would do for the middle class and other income groups. The perspective that it will be great for everyone is generally held by the Republicans. While those who are set on believing the bill will hurt most everyone except the wealthy and corporations tend to be Democrats.
Chief economist of Tax Analysts, Martin Sullivan says there are many ways to determine how a tax plan might help or hurt income groups. What happens to after-tax income is one key way to assess the situation wisely. It’s a measure economists use to assess an income group’s well-being once tax changes are made. The better off they will be the more after-tax income rises for low- and middle-income households as a result of those changes.
To see how middle-income and other households might fare under the Senate bill, here is a list that has calculated after-tax income changes using distribution tables created by the Joint Committee on Taxation, the nonpartisan tax scorekeeper for the House and Senate.
How the numbers break down from year to year:
In 2019: Those making between $50,000 and $75,000 would see theirs rise by 1.3%, less than the 3% jump for those making between $500,000 and $1 million, or the 2.1% bump for households making more than $1 million. Every income group would end up with more after-tax income.
In 2021: The $200,000 to $500,000 income group would do best, seeing a 2% rise in after-tax income. But those making $40,000 to $50,000 would only see a 0.5% bump. Those making $50,000 to $75,000 again get a 1.3% increase, just a little below the 1.5% jump in after-tax incomes for those making $1 million or more.
In 2023: The $30,000 to $40,000 band would see zero change while those making less would actually see slightly less after-tax income than they would if no tax changes were made. Groups making $40,000 or more would have a little more money after paying Uncle Sam. But those who would enjoy the biggest bumps are those making from $500,000 to $1 million (2%) and those making $200,000 to $500,000 (1.6%).
In 2025: Those making $30,000 to $40,000 would see zero change in their after-tax income while those making less would see a less than 1% drop in their after-tax incomes. By contrast, those making between $500,000 and $1 million would see a 2% jump. And those making $50,000 to $75,000 along with those making more than $1 million would get less of a pop, at 0.8%.
In 2027: Households bringing in $500,000 or more would see tiny increases of less than 0.5%. Aside from those on the high end, every group would experience drops in average after-tax income or no change.
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