The Senate’s plan to rewrite the tax code would go much further than a competing House proposal toward making good on Republican promises to focus on the middle class, a new report shows.
Moderate-income people would consistently see the largest percentage declines in their tax bills, according to an analysis released late Saturday by the official, nonpartisan Joint Committee on Taxation.
In 2019, people in the middle of the income spectrum, earning between $50,000 and $70,000, would see their taxes fall by 7.1 percent. Those earning between $20,000 and $30,000 would see a 10.4 percent decline, the report shows, while millionaires would get a 5.3 percent tax cut.
Unlike with the House plan that trend holds up throughout the period over which JCT analyzed the Senate proposal. In 2027, for example, millionaires would get a 2.8 percent tax cut from the Senate plan, compared with a 6.1 percent decline for people in the middle and a 10.3 percent reduction for those earning between $20,000 and $30,000.
How Republicans’ tax plans would affect people in different income groups has been a hotly contested issue in Congress, with the GOP contending its plans are aimed at the middle class while Democrats call them a giveaway to the rich.
The House proposal would have a muddled impact on people in different income groups, JCT found earlier this month. At first, modest-income people would be its biggest winners, but the outlook changes after the first few years. Some modest-income people would face tax increases under the House plan, JCT found, and by 2027 millionaires would be its biggest winners.
The analysis of the Senate plan, which the Finance Committee plans to formally take up on Monday, shows people in every income cohort receiving a tax cut on average, though it did not examine whether some people within those groups would face tax increases.