The Tax Policy Center, a joint venture of Brookings Institution and the liberal Urban Institute, assessed that the tax package pushed by the Senate will compel 50 percent of all taxpayers to pay increased levies within 2027. This public announcement was made even as President Donald J. Trump pledged a complete tax makeover by Christmas. Trump said that the American public will enjoy substantial tax cuts by that time. He presented it as a gift for the Americans by the American Government.
Senator Ron Wyden, the Senate Finance panel's top Democrat, said that the study shows middle-class Americans can expect an increase in tax as per the GOP plan. He said that profits will be made by corporate sponsors to the tune of trillions of dollars. This assessment has been contradicted by Antonia Ferrier, spokeswoman for Mitch McConnell, the Senate Minority Leader. She cited a different study by Tax Foundation. The latter, a conservative slanted group, said the bill will generate increased wages and create almost one million jobs. She said the economic growth would be stimulated to create almost $1.3 trillion when it comes to federal revenues.
If one goes by the findings and assessments made by Tax Policy Center, although tax reductions would be enjoyed by all income groups, about nine percent of the taxpayers would pay steeper taxes as per the 2019 Senate bill. This would be effective from that year. The proportion would increase to 50 percent within 2027. This will happen due to the expiration of personal tax cuts brought about by the legislation in 2026. This was done by the GOP to limit budget deficits this bill will create.
Come 2019, individuals earning less than $25,000 would enjoy an average tax reduction of $50. This comes to about 0.3 percent of the post-tax income. An average tax cut of about $850 will be enjoyed by middle-income earners. In contrast, individuals making a minimum of $746,000 will enjoy a median slash of $34,000. This comes to about 2.2 percent of the income. It also assessed that the proposal by the Senate will generate sufficient economic growth to gather an extra revenue of approximately $169 billion over a span of 10 years. This falls much below the intended target of about $1.5 trillion which the non-partisan Joint Committee of the Congress has estimated that the bill will generate over the period.