From the Institute on Taxation and Economic Policy (http://www.itep.org/):
It’s clear that the pending tax bill will overwhelmingly benefit the rich and corporations. ITEP analysts have produced in-depth, distributional analyses of both the House and Senate plans. In addition, we continue to produce analyses that explore and explain intended and unintended consequences of proposed tax changes. Once details of the House and Senate compromise are available, we will produce a new 50-state distributional analysis. Meanwhile, below are our latest posts on notable provisions in either the House or Senate versions of the bill.
Donate to private schools and get a ROI … seriously
For years, private schools around the country have been making an unusual pitch to prospective donors: give us your money, and you’ll get so many state and federal tax breaks in return that you may end up turning a profit. Under tax legislation being considered in Congress right now, that pitch is about to become even more persuasive. By eliminating the state and local tax deduction, Congress would make this return more lucrative. Read the report or a blog summarizing the report.
Got kids in college? Tax writers say too bad
Parents of college students or kids in their last years of high school are more likely to face a tax hike than others under the tax legislation moving through Congress. The House tax bill would raise taxes on 13 percent of taxpayers generally in 2019, and that figure would go up to 21 percent in 2027. But for taxpayers claiming at least one dependent child over age 16, these figures are 30 percent and 51 percent. Read the analysis
“Compromise” for the rich isn’t really a compromise
Earlier this week, ITEP explained that two possible “compromises” to improve the Senate tax bill would accomplish very little other than to make the plan more expensive. Now, Republican leaders are discussing a third “compromise” that would cost more than $8 billion annually, help far fewer taxpayers and concentrate its benefits almost entirely on the richest households. Read more
America First! Just not in the tax bill
The tax plans moving through Congress only put the richest Americans first. Everyone else will play second fiddle to foreign investors. In 2019 alone, the richest one-fifth of Americans would get $176 billion under the House bill (and nearly half of this goes to the wealthiest 1 percent). Foreign investors would get a staggering $50 billion in 2019. Each of the other income quintiles would collectively receive a significantly smaller share of the tax cuts than foreign investors. Read more
About that one-page Treasury Department tax plan “analysis”
As analysts who spend time crunching numbers, ITEP and most others who work in this space don’t make economic projections without rigorous data to back it up. The Treasury Department, however, has turned economic analysis into fortune-telling? Prophesizing? and simply asserted the GOP tax plan will make the economy grow. The administration also tries to have it both ways by claiming wild economic growth will make tax breaks cost-free but also insisting that benefits for households must be cut to achieve growth. Read more
Rich blue states still would pay more under SALT compromises
Residents of California and New York pay a large amount of the nation’s federal personal income taxes relative to their share of the population. The Senate tax bill would increase the share of total federal personal income taxes paid by both states. At the same time, it would reduce total federal personal income taxes paid by Florida and Texas, which would receive a larger share of the tax cuts relative to what they pay to the federal government today. Read more
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