Largest tax plan benefits flow to wealthiest Georgians, GBPI says

[private]Georgia’s wealthiest residents stand to gain the most from the tax cut bill that is moving toward a vote by the U.S. House this week, says the Georgia Budget & Policy Institute (GBPI).

“Most of the benefits are likely to flow to a narrow sliver of wealthy Americans and profitable corporations, with regular families seeing only minor gains,” said Wesley Tharpe, a tax policy analyst for the Atlanta-based think tank.

Tharpe said the wealthiest 1 percent of Georgians — households with annual incomes of $543,000 or more — will receive 39 percent of the aggregate tax cut. That share of the tax benefits will increase over the next decade to 59 percent by 2027, he said.

“Georgia households in the top 1 percent could enjoy an average tax cut around $56,000 a year in 2018, growing to $75,000 in 2027,” Tharpe said

Conversely, the tax benefits in the bill that would benefit lower-income Georgians will decrease over the next decade, he said.

“The middle fifth of Georgia households, or taxpayers earning from $38,600 to $59,300 a year, could expect an average annual tax cut of $500 in 2018, falling to $220 by 2027,” Tharpe said.

The most prominent feature of the proposed tax bill is a reduction in the corporate tax rate from 35 percent to 20 percent. The bill would eliminate the estate tax, a move that would benefit people like Jared Kushner and Ivanka Trump who stand to inherit great wealth from their parents.

The tax bill also would terminate credits and exemptions that many taxpayers can now claim, such as the deductions for home mortgage interest and for state and local taxes.

Tharpe said an estimated 9 percent of Georgians would actually pay higher taxes in 2018 if the tax bill passes, a number that would rise to 22 percent by 2027.

Donald Trump is a major supporter of the tax cuts, as are the Republican members of Georgia’s congressional delegation.

“Conservatives who embrace tax reform want to ensure that hardworking Americans enjoy and invest more of what they earn because we trust them,” said Rep. Doug Collins (R-Gainesville).

“There’s no denying the positive impact a tax overhaul will have on our country,” said Sen. David Perdue. “This will lead to more job opportunities, more capital at work in our economy, and more savings for taxpayers.”

“This once-in-a-generation tax overhaul will bring a new era of job growth, wage increases and a higher standard of living for American workers and families,” Sen. Johnny Isakson said.

© 2017 by The Georgia Report


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