Trump Tax Plan To Benefit "Top 1%" Most, Cost $2.4 Trillion, Middle Class To Pay More Taxes

Tyler Durden's picture

Based on what we already know about the proposed Trump tax reform, which can be summarized as follows:

  • collapse the seven individual income tax rates to three (12, 25, and 35 percent),
  • increase the standard deduction,
  • eliminate personal exemptions,
  • increase the child tax credit,
  • eliminate most itemized deductions,
  • repeal the individual and corporate alternative minimum taxes,
  • repeal the estate tax,
  • reduce the corporate tax rate from 35 to 20 percent, tax pass-through business income at a top rate of 25 percent,
  • allow businesses to fully expense investment in equipment and machinery for at least five years,
  • adopt a territorial tax system that would exempt the foreign earnings of US corporations from US tax

... moments ago the Tax Policy Center released its analysis of what the practical impacts of the Trump tax plan will be on the broader population. Below we present the key findings.

The tax plan will cost $2.4 trillion over the first decade and $3.2 trillion over the second dacade, on a static basis

  • The proposal would reduce federal revenues by $2.4 trillion over the first ten years and $3.2 in the second decade. This means that absent a matched deduction in spending, US deficit and debt will increase by a similar amount. This is a problem as a Senate GOP budget resolution unveiled on Friday only allows for adding $1.5 trillion to the debt, implying a revenue shortfall of just under $1 trillion.
    • The business income tax provisions—including those affecting corporations and pass-through businesses—would reduce revenues by $2.6 trillion over the first ten years. Elimination of estate and gift taxes would lose another $240 billion. The individual income tax provisions (excluding those related to business income) would increase revenues by about $470 billion over the same period.

While many Americans will benefit, the biggest gains will go to the 1%, whose after-tax income would increase by over 8%.

  • In 2018, the average tax bill for all income groups would decline: taxpayers in the bottom 95 percent of the income distribution would see average after-tax incomes increase between 0.5 and 1.2%. However, and where the Democrats will have a field day, taxpayers in the top 1 percent (incomes above $730,000), would receive about 50 percent of the total tax benefit; their after-tax income would increase an average of 8.5 percent.
  • Between 2018 and 2027, the average tax cut as a share of after-tax income would fall for all income groups other than the top 1 percent. In 2027, taxpayers between the 80th and 95th percentiles of income (between about $150,000 and $300,000) would experience a slight tax increase on average.

The problem is that at the same time, taxes for substantial portion of taxpayers will go up:

  • In 2018, about 12% of taxpayers would face a tax increase of roughly $1,800 on average. Where it gets worse is that many of those who form the backbone of the upper-middle class, or more than a third of taxpayers making between about $150,000 and $300,000, will pay more, mainly because most itemized deductions would be repealed.

Fast forward to 2027, when the overall average tax cut would be smaller than in 2018, increasing after-tax incomes 1.7 percent. Taxpayer groups in the bottom 80 percent of the income distribution—those making less than about $150,000—would receive average tax cuts of 0.5 percent or less of after-tax income. However, taxpayers making between about $150,000 and $300,000 would on average pay about $800 more in taxes than under current law. And the one item which Democrats will love: about 80% of the total benefit would accrue to taxpayers in the top 1 percent, whose after-tax income would increase 8.7 percent.

It gets worse: by 2027, taxes would rise for roughly one-quarter of taxpayers, including nearly 30 percent of those with incomes between about $50,000 and $150,000 and 60 percent of those making between about $150,000 and $300,000.

According to the Tax Policy Center, the number of taxpayers with a tax increase rises over time. This is because the plan would replace personal exemptions, which are indexed for inflation, with additional credits for children and non-child dependents that are not indexed for inflation. In addition, indexing tax brackets and other parameters to the slower-growing chained Consumer Price Index means that over time more income is subject to tax at higher rates.

Finally, there is of course, the repeal of the state and local tax deduction, a move which is expected to be widely hated by homeowners across the US, but as the chart below shows, by democrat states far more than republican states.

As BofA writes, blue states with high state and local taxes will be the most adversely impacted from the loss of this deduction. Thus, opposition in the Senate will mainly come from Democrats, while Republicans will mostly be on the same page. But, the situation should be more contentious in the House. Data from the Tax Policy Center reveals that 26 of the top 50 districts in terms of SALT deduction usage had a Republican representative. Republicans will likely face more internal pushback from these members. Ultimately, a House bill would fail if two dozen Republicans (and every Democrat) were opposed.

More in the full report below (link):

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
yanetjellen's picture


BaBaBouy's picture
""Trump Tax Plan To Benefit "Top 1%" Most, Cost $2.4 Trillion, Middle Class To Pay More Taxes""


Another Post Election - Same Shit, New Boss Same as The OLD Boss, We're Fucked Again . . . Helloooooooo SWAMP ...

NugginFuts's picture

Is anyone surprised?

<<<<< No. Trump is the FUBU of rich people - For Us, By Us. He only cares about making his buddies rich.

<<<<< Yes! I believed him when he said he would lower taxes for the little guy. 

jcaz's picture

The "little guy" doesn''t pay taxes now, numbnuts......

NugginFuts's picture

At this rate, neither will the 1% or corporations. Who ends up holding the bag?

eatthebanksters's picture

I do not trust the Tax Policy Center...they are part of the Establishment.

JimmyJones's picture

You guys do realize that the standard deduction doubling from 12,000 to 24,000 is a home run for people making 100,000 - 250,000 that file jointly right?

Hal n back's picture

only if they have use the std deduction now. for a single person, Its 6300 going to 12000-or a 5700 benefit, minus the loss of exemption of 4600 so they pick up 1000 in lowering income.

if a single has more than 12000 iremized deductions and has state income tax and property tax which pushes them over the 12k, they lose.

The whole thing is a pile of crap. rememebr the market has been thinking 15% corp rate and now its 25%. but if the people have les smoney to spend then its a bust for the econoy.

veru high incoem folks win here--they had lost their itemized deductions based on phaseout. Ya cannot take away whats already been taken awaybut they wil see the incremental   tax rate reduced to 35%-4% for each 100k or they pick up 40k if they have 1 mil of taxable ncome.

its an insult


Kotzbomber747's picture

The Orange Clown lied and flip-flopped,,,again!

Gee, what a fucking surprise...hahahaha!

Oh, but wait, he's gonna drain the swamp, right? Suckerrrrrs!

Escrava Isaura's picture

…..Benefit "Top 1%" Most

…..Data from the Tax Policy Center reveals that 26 of the top 50 districts in terms of SALT deduction usage had a Republican representative. 

This bill is so dead that we should not even bother commenting about it.


YUNOSELL's picture

No surprise here at all -- If this is any consolation, Hillary would have benefited the 1% even more with the tax cuts, LOL

sickavme's picture

Dude, who cares about the 1%... Thats a classic(and obsolete) manufactured political football by the democrats...

All that really matters is the REAL driver of the economy, SMALL/MEDIUM business, gets the tax lowered.


Which it does... and its all that trump needs to get reelected...


Seriously, the dems are BANKRUPT... Do you really think a classic argument such as the 1% crap is really gonna save their asses???


Hell fuckin no! They are DONE! They are the LOSERS!


Fuck em.


IH8OBAMA's picture

That's really strange.  I couldn't find Chuck Schumer's name mentioned as the author of this article anywhere.  I did see that the analysis was supplied by the biased Brookings Institute.

BTW, the 1% in NY and CA are going to get nailed for losing their state tax deduction.


beemasters's picture

Trump: "Nothing to see here... NFL, NFL, NFL....Oh did I mention NFL?"

And his popularity soars. Sad to see how the population is so easily manipulated. Trump only looks after the Trumps. As I said, he is a businessman; he couldn't care less about the National Anthem. As always, public perception is all that matters.

ergatz's picture

Polls are slanted. Trump was always gonna be a DISASTER.

jeff montanye's picture

your link is largely correct imo and still i'd rather trump than hillary as president.  as with the repeal of obamacare, this tax plan doesn't seem likely to be passed into law.  indeed trump seems unlikely to pass much legislation at all.  where he may have some benign effects, eventually, are in foreign policy and law enforcement.  meanwhile it is the farce of the legacy media, as one, opposing him, threatening impeachment, etc., using false flags such as russiagate and charlottesville to push their false deep state narrative, that enlightens and radicalizes the base of the republican party and the sanders/gabbard wing of the democrats.  the neocons/zionists are increasingly holed up in the clinton wing of the dnc and vulnerable, to a degree, to crossfire from the others.

Bes's picture


i suppose the trumptards

will chalk this up to 5D

no wait, 36D chess


and imagine the trumpflakes....


trump is nothing but a


wall street FED bitch


Whoa Dammit's picture

It looks to me like certain ethnic groups who breed like rabbits and like to have their extended families live with them will come out the best, due to all of the child and family care credits. 

jeff montanye's picture

yes and they will also be able to finally pass their estates of elaborately wheeled vehicles, flamboyant clothing, luxury home entertainment systems, recreational drugs and weapons to their heirs tax free.

not to mention their overseas corporate activities become untaxable.  oh wait.

boattrash's picture

How have you been Dammit? Me and my 14 Undocumented Alien Children (ironically, all of their names are Dependent) are all doing great and I'm certain we will be on April 15th...I hope yours are well too.

Sincerely, BT

political_proxy's picture

Was not by chance he sang just like the usurper, but with diferent lyrics.

As long as you take of [our agenda] you can do WTF else you want - because cabinet picks and judicial placements don't matter a bit; they ony "interpret" the law our owned (paid off) CONgressfucks legislate.

quadraspleen's picture

“Sad to see how the population is so easily manipulated.“

Really? Have you been living under a rock for the last 40 years or something?

inhibi's picture

Youre stupid.

Who do you think buys from small businesses? The middle class.

The lower class cant afford small business products, because the cheapest products are always made/sold by the largest corporations (economies of scale).

When you lower the middle classes purchasing power, BYE BYE SMALL BUSINESS.

Also, when you dont enforce anti-trust laws BYE BYE SMALL BUSINESS.


Demon Slayer's picture

The top 1% pay the vast majority of federal income tax. Any reduction of taxes, of course, will benefit them....but that's not the point. It IS a phony Democratic Party talking point.

Regulations on businesses if cut to reasonable levels, also benefit everyone, but the Dems would say that Trump wants to kill you by polluting the water and air.

It's all such bullshit. We had clean air and water regulations in the late 70's, so why did Obama add 40,000 pages or new regs every year for eight years? Because he's a communist devil and wants to Cloward and Piven the US into the ditch, so they can come on with their devious plans.Since Obama's new bs regulations, doctors have to hire more lawyers than nurses just to comply..

It's madness...The Dems are hell bent to collapse the US though mass third world immigration, inter racial hatred and chaos, feminizing the men. dumbing down our kids in the schools with drugs, Common Core moron math, and everything else under the sun...

These bitches swear an oath to the constitution and then trash it the next day and every day thereafter..

Hang them all..How TF did it become legal to push communism in the US?

jeff montanye's picture

the top one percent doesn't even pay a majority of the federal income tax.

want to fix obamacare?  do single payer.  like every other advanced nation in the world; pay half as much and get better results.

both republicans and democrats push for immigration, just somewhat different sorts: reps want cheap labor both menial and professional, dems want families together and votes.  the schools teach obedience and both parties as well as the deep state welcome that and the drugs.  ditto both parties trashing the constitution (george w. bush invented the patriot act).  you have a partisan point on "feminizing" men though the hard core feminists would probably put the point more "stop the men from killing/abusing the women".  

you can't and won't "hang them", even some.  it's always been "legal" to push communism in the u.s. (first amendment) whether or not it was in practice (mccarthy, palmer raids, etc.).

vote them out.  bust 9-11.  those can actually be done, whether they will or not remains to be seen.

Mr Twitch's picture

'A yuge wall'


Lolz-every past pres has talked  up a wall...derp

Phat Stax's picture

True Dat.  A billionaire's gonna have your back.  Riiiiiight....

Amaroosta's picture

You're right, I should have voted Hillary

Dr.Vannostrand's picture

Or you can not consent to this sham of a system. 


Bobbyrib's picture

The more I think about my write in of Ron Paul, the more I laugh at the fools silly enough to vote for a democrat or republican.

lil dirtball's picture

Ha ha! The more I think about you moronic voters, the more I laugh at your continued misplaced loyalty to a system that fucks you every day that you wake up. You will wake up and engage it again tomorrow - and get fucked again.

Ha ha, proud smirking ZHombie! Ha ha!

shovelhead's picture

That will scare the bejeebers out of them.

Praeda2's picture

Works for me but then, I'm not a poor fag like you.

political_proxy's picture

presidents are selected, not elected

...and no, not by the citizenry.

JimmyJones's picture

Agreed, somewhat, but I have to think that the majority of people use the Standard deduction and don't itemize.  If my assumption is true than that would have a net increase in peoples overall disposable income since the people that itemize are a small minority. I don't see the harm in just keeping itemization and also increasing the standard deduction but then again I am not a "Power that be".  One thing that isn't in there that was campaigned on is the deduction for Childcare that would be adjusted based on the median price in your local area.

Raising the Child Tax Credit phase out limit to 150,000 Household income is also a pretty good deal for the regular working family.

I wouldn't call it an insult just not what you or I wanted in its entirety.  But as the saying goes if you try to please everyone you wind up pleasing no one.

NiggaPleeze's picture

the majority of people use the Standard deduction and don't itemize

People who don't pay taxes don't itemize, in general, but most middle class people do (42% of those making 50-75K, 59% of those making 75-100K and 79% of those making 100-200K).  Trump wants to take away the state income tax and mortgage interest deductions.

Row Well Number 41's picture

People who own houses itemize, so do those that run self employed businesses, but most clock punching middle class mooks not in those categories don't, it's not worth it most of the time.

Tachyonic's picture

I own a house, I don't itemize.  When house is paid in full, no mortgage interest.

Falcon49's picture

What about real estate taxes?

JimmyJones's picture

The National Realtors Association is one of the most powerful lobbied out there, that mortgage deduction isn't going anywhere. 

evokanivo's picture

the mortgage interest deduction is a bullshit freebie thrown in for voters (often homeowners) while the poorest (renters) get double-fucked. i don't like the bill, but that's definitely not what i would pick out as upsetting. that's one of the few things he got right - don't you agree that we should tax people the same and then let them make whatever decisions they want? buy a house, have 20 kids, whatever - long as i don't pay, do what you want.

Bobbyrib's picture

I grew up in an upper middle class suburb in New Jersey. As our Brazilian friend pointed out they voted in Republicans. If this "Tax Cut" goes through they're going to get screwed bad.

porcsale's picture

At some point ordinary folks will recognize there's a civil war going on right now.

Bobbyrib's picture

The frog will get boiled. Welcome to idiocracy.

inhibi's picture

As Buffet already said, the rich won the war (the war being the Tax Laws)

Sofa King Confused's picture

"only if they have use the std deduction now. for a single person, Its 6300 going to 12000-or a 5700 benefit"

Who would of thought I get to take a deduction for getting Chlamydia

Jack McGriff's picture

Fuck off you jealous and envious cunt!  Taxes are THEFT and besides what the fuck do you care about what others make if they BUSTED THEIR ASS and gave their lives to success?  Fucking wage slave!  Get back to work, loser!