As Congress nears passage of a Republican-backed tax bill, there’s been a lot of discussion about who will benefit and who won’t. Here is some data about the winners and losers under the bill.
We’re using data from two sources. One is the Joint Committee on Taxation, the nonpartisan group that analyzes tax bills for Congress. The other is the Urban Institute-Brookings Institution Tax Policy Center, an independent group that models the effects of tax legislation. Both groups analyzed previous versions of the bill, but in this article we’ll look at their analyses of the final version that, assuming it passes and is signed by President Donald Trump, will become law.
We’ll look at a few key issues.
• Will poor, middle-class and rich Americans all benefit, on average?
• Are the gains for each income group proportionate to their share of the tax-paying population?
• Can taxpayers expect any gains to last?
Here’s our first chart, which uses Joint Committee on Taxation data. It shows how various income ranges would fare in 2019 — the first year the committee looked at — under the bill. We’ve listed the overall change in taxes paid for each income group, with cuts noted as negative and increases noted as positive (the second column). We then calculated the share of those gains received by each income range (the third column), and compared that to the percentage of taxpayers who fall into that income range (the fourth column).
Total change in federal taxes in 2019
Share of reductions in taxes in 2019
Percentage of all taxpayers falling in this income range in 2019
Less than $10,000
– $396 million
$10,000 to $20,000
– $1,792 million
$20,000 to $30,000
– $2,982 million
$30,000 to $40,000
– $5,416 million
$40,000 to $50,000
– $6,728 million
$50,000 to $75,000
– $23,046 million
$75,000 to $100,000
– $22,437 million
$100,000 to $200,000
– $70,372 million
$200,000 to $500,000
– $65,485 million
$500,000 to $1,000,000
– $23,947 million
$1,000,000 and over
– $36,853 million
– $259,454 million
The good news for taxpayers is that every income group would pay less in taxes in 2019. (This is the case for these income groups as a whole — individual taxpayers may not necessarily gain. More on that in a moment.)
That said, the benefits of the tax bill would flow disproportionately to wealthier taxpayers.
About half of the households filing returns had incomes below $50,000, according to the Joint Committee on Taxation, but they collectively get just 6.6 percent of the tax gains in the bill.
By contrast, only about 1 percent of households filing returns had incomes above $500,000, but they stand to gain 23 percent of the benefits from the bill. (It’s worth noting that the United States has a progressive tax system, which means that taxpayers with higher incomes pay a larger share of their income in taxes. So it’s not surprising that wealthier taxpayers would receive a greater share of the benefits in a tax bill.)