The top 1 percent (those making $730,000 or more) would receive half of all the plan’s tax cuts while middle-income households (those making between about $50,000 and $90,000) would get only about 8 percent of the total benefit.
The disparity would grow over time. By 2027, the top 1 percent would get 80 percent of the plan’s tax cuts while the share for middle-income households would drop to about 5 percent. On average, taxes for the top 1 percent would fall by more than $200,000 or 8.7 percent of their after-tax incomes. The top 0.1 percent would do even better. They’d get an average tax cut of more than $1 million, a 9.7 percent boost in their after-tax incomes.
Overall, individual income taxes would increase under the framework while business taxes would decline, making this proposal a mirror image of the 1986 tax reform, which raised taxes on business to help finance tax cuts for individuals.
Very high income taxpayers would benefit primarily from the framework’s proposed cuts in corporate taxes and, especially, pass-through businesses. The Big Six would cut the corporate tax rate from 35 percent to 20 percent, and the tax rate on pass-throughs such as partnerships from 39.6 percent to 25 percent. The plan would also reduce individual income tax rates, repeal the Alternative Minimum Tax and the estate tax, and eliminate many itemized deductions.
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