Yep, the rich will get richer off you....

The numbers are in: Trump's tax plan is a bonanza for the rich, not the middle class

Multi-millionaires get more than $700,000 back. The poorest fifth gets $60.

Updated by Dylan Matthews

The tax reform “framework” proposed by the Trump administration and Republican leaders in Congress would give the largest benefits to the top 1 and top 0.1 percent of households, according to a new analysis by the nonpartisan Tax Policy Center. The poor and middle class would get comparatively little. And the whole thing would leave a $2.4 trillion hole in federal revenue in the first decade.

The richest 1 percent — households making at least $732,800 — would get an average tax cut of $129,030, the analysis finds. For the typical one-percenter (who earns much more than $732,800), that means 8.5 percent more income after taxes. The richest 0.1 percent, earning at least $3.4 million a year, would get $722,510 back on average, for a 10.2 percent average boost in after-tax income.

By contrast, the middle class (households earning $48,600 to $86,100 a year) would get $660 back, a 1.2 percent income boost. The poorest fifth of Americans, earning $25,000 or less, would only get $60, a 0.5 percent increase.

Both in raw dollar amounts, and percentage terms, the cuts are concentrated among the richest Americans.

About one in eight families, especially households earning low-to-mid six figures, would see taxes go up.

More than 40 percent of households earning between $216,800 and $307,900 (the 90th to 95th percentiles) would see a tax increase; the average tax hike would be nearly $3,000. That's largely a consequence of the proposal's decision to eliminate most itemized deductions and in particular the deduction for state and local taxes, which doesn't help ultra-rich households much, but does help rich but not super-rich families (particularly in high-tax states like New York, Illinois, Pennsylvania, or California) considerably.

While the issue is less pronounced for the middle class, 13.5 percent of middle class households would see a tax increase, of about $1,000 on average:

The entire cost of the plan comes from its corporate tax provisions, TPC finds. Reducing the corporate tax rate from 35 to 20 percent costs about $2 trillion over 10 years, while capping the rate on "pass-through" companies — like those in the Trump Organization — to 25 percent (down from 39.6 percent today) costs about $770 billion.

While some individual tax provisions — like cutting the top rate for high earners, eliminating the Alternative Minimum Tax and estate tax, and increasing the standard deduction and child tax credit — cost considerable money, TPC finds that the plan’s individual tax changes as a whole actually raise a modest amount of money. The costly changes on the individual side are paired with eliminating personal exemptions (which currently give taxpayers a $4,050 deduction for every person in the household) and eliminating the state and local tax deduction, which more than pay for the individual cuts.

You can think of the plan, then, as a corporate tax cut financed (insufficiently) by raising individual taxes on a concentrated subset of middle and upper-class individuals:
Put together, the whole thing costs $2.4 trillion in revenue over 10 years, before you take into account interest the government would have to pay on all that debt.

There are a number of ways the GOP could try to plug that hole. One — alluded to in the tax plan but not modeled by TPC — would be to add a fourth tax bracket, with a tax rate above 35 percent, for individuals. That would raise a significant amount of money, but probably wouldn’t be enough to raise $2.4 trillion, especially if the rate is below the current top rate of 39.6 percent.

Another obvious option would be to cut the corporate tax rate slightly less — to 25 or 28 percent, say, rather than 20 percent. The provision cutting taxes for pass-through companies, which serves no economic purpose and would be a major incentive for tax evasion by rich individuals, could also be junked. But House Freedom Caucus Chair Mark Meadows (R-NC), a leader of House conservatives, has pledged to oppose any plan that includes a corporate rate higher than 20 percent or a pass-through rate above 25 percent. That indicates Republicans will face a ton of pressure to keep those cuts, even as they make the whole package quite costly.

Republicans have also indicated they want to score the plan “dynamically” — that is, assuming it will have a positive effect on economic growth that will offset some of the cost. It’s unlikely, however, that the Joint Committee on Taxation will judge the plan to cause a whopping $2.4 trillion in additional revenue from growth. Tax cuts don’t pay for themselves.

TPC emphasizes that their numbers are preliminary, and they had to make a number of assumptions about parts of the plan that the GOP framework left underspecified. The White House and congressional Republicans have declined to say where the new tax brackets for individuals in their plan kick in; TPC assumed the same thresholds as in a 2016 plan that House Republicans released. The framework also doesn’t say how much it’ll increase the child tax credit; TPC assumed it’d grow from $1,000 to $1,500, as it does in that 2016 House plan. And the framework specifies a few vague revenue-raisers, like a limit on deductibility of corporate debt payments, that TPC couldn’t model. If those get more specific, they could raise more revenue to pay for the plan.

Most contentiously, TPC assumes that corporate tax cuts overwhelmingly help the wealthy. While this is the prevailing view among economic modelers who think the tax is mostly paid by wealthy corporate shareholders, the White House strongly disagrees with it, and this week even removed a Treasury Department research paper which argued that corporate taxes hit the rich.

In any case, TPC’s analysis is a strong indication that President Trump’s claim that the plan was designed "protect low-income and middle-income households, not the wealthy and well-connected" was wildly misleading, that Treasury Secretary Steve Mnuchin is breaking his famous pledge to not enact an absolute tax cut for the wealthy, and that White House economic adviser Gary Cohn’s contention that “the wealthy are not getting a tax cut under our plan” and Mnuchin’s claim that the plan will reduce the deficit by $1 trillion were both straight-up lies.