Trumps 2017 Tax Break Extension chart and clarification . . .
Sources: CBO (for many provisions), *JCT( R&E provision), **CRFB (Curiosity provision)
New estimates from the Congressional Funds Workplace (CBO) put a price ticket of almost $5 trillion on extending all of the Trump-GOP tax regulation, which is usually scheduled to run out on the finish of 2025. That’s greater than double what the regulation initially price when it was enacted in 2017. The Trump-GOP tax regulation was an costly failure that did little to spice up staff wages, create jobs, or enhance financial progress. As a substitute, it principally funneled sorely wanted income to the ultra-wealthy and overseas traders, whereas exacerbating wealth inequality.
2017 Trump Tax Legislation Was Skewed to Excessive Earnings Brackets
Just like the Bush tax cuts, the 2017 tax regulation advantages high-income households greater than low- and moderate-income households. Extending the Trump tax cuts expiring on the finish of 2025 (the regulation’s particular person revenue and property tax provisions) gives extra windfall advantages to high-income households. The cuts come on high of the massive advantages they already obtain from the 2017 tax regulation’s everlasting provisions.
2017 Legislation Created New Tax Benefits for Rich Individuals and Worthwhile Companies
Pricey Provisions Primarily Benefiting the Nicely-off
Giant, everlasting company tax cuts. The centerpiece of the regulation was a deep, everlasting minimize within the company tax fee — from 35 % to 21 %.
20 % deduction for pass-through revenue. The regulation adopted a brand new 20 % deduction for sure revenue benefiting house owners of pass-through companies.
Chopping particular person revenue tax charges for these on the high and weakening the choice minimal tax (AMT). Cuts the highest particular person revenue tax fee from 39.6 % to 37 % for married {couples} with over $600,000 in taxable revenue (increased gross revenue). The regulation weakens the AMT. A regulation guaranteeing higher-income individuals taking massive deductions and different tax breaks pay a minimal tax.
Doubling the property tax exemption. Doubles the quantity the wealthiest households can go on tax-free to their heirs, from $11 million to $22 million (listed for inflation) for married {couples}.
For low and average incomes, there was deductions and likewise offsets countering the deductions.
Along with the highest 1 % receiving massive tax cuts, the 2017 regulation delivered the most important common tax minimize measured as a proportion of pre-tax revenue to households within the 95-99th percentiles. The tax minimize from the 2017 regulation quantities to three.2 % of their pre-tax revenue, on common (or almost $13,000, on common). That is 3+ occasions the ~1 % common proportion revenue achieve of the underside 60 %. (See Determine 2.)
The 95-99th percentile group roughly consists of individuals with incomes within the $400,000 to $1 million vary (TPC). Itis sometimes called the “upper middle” class, a deceptive characterization. They the highest 5% by revenue in one of many richest nations on this planet. Additionally they have excessive ranges of assets of which median web value was over $3.9 million in 2022, (Survey of Client Funds). Beneath $400,000 in revenue having simply ~$169,000 and ~$52,000 for these having incomes within the decrease 50% of revenue.
I’ve not touched up company revenue taxes. Neither have I mentioned how this compares to the 2001 and 2003 Bush tax cuts. At a later time, I’ll get to these. The hyperlink is there in case you want to geta forward of my dialogue.
“CBO: Extending Trump Tax Cuts Will Cost Nearly $5 Trillion.” People For Tax Equity
“The 2017 Trump Tax Law Was Skewed to the Rich, Expensive, and Failed to Deliver on Its Promises,” CBPP
“Budgetary Outcomes Under Alternative Assumptions About Spending and Revenues,” CBO
