By David Morgan
WASHINGTON (Reuters) – The wealthiest Americans would benefit the most from President Donald Trump’s proposed tax cuts while many upper middle-income people would face higher taxes, independent experts said on Friday in the first detailed analysis of the plan.
A U.S. Senate panel took Trump’s proposal, announced on Wednesday, a step forward by unveiling a budget plan for the coming fiscal year that acknowledges lost revenues from tax cuts, while Trump pressed ahead with selling the plan to the public.
A report from the non-profit Washington-based Tax Policy Center found that in 2018, about 12 percent of taxpayers would face a tax increase of roughly $1,800 on average.
That includes more than a third of taxpayers making between about $150,000 and $300,000, mainly because most itemized deductions would be repealed including for state and local taxes, it said.
Its analysis showed that the Republican tax proposal would fuel the growing federal deficit, providing $5.99 trillion in tax cuts while reducing federal revenues by a net $2.4 trillion in the next 10 years.
Trump, who promised major tax cuts as a candidate, has called his proposal “a miracle for the middle class,” but the report concluded it would provide middle-income taxpayers uneven tax relief. In 2018, all income groups would see their average taxes fall, but some taxpayers in each group would face tax increases, it found.
Taxpayers in the top 1 percent of incomes – above $730,000 – would receive about 50 percent of the total tax benefit from the tax overhaul, with their after-tax income forecast to increase an average of 8.5 percent, the group said.
“The biggest share of people with increased taxes will be … people who might be considered upper-middle-income people, high-income professionals, people whose income is between $150,000 and $300,000 in a year in 2017,” Tax Policy Center co-director Eric Toder said.
The bottom 95 percent of taxpayers could expect a tax cut of 0.5 to 1.2 percent,…