Most of the GOP tax law’s 20 percent deduction for income from pass-through businesses will go to the wealthy, according to a new report released Monday by Congress’s own bipartisan Joint Committee on Taxation (JCT).
The JCT analysis estimated that about 44 percent of the tax benefit will go to people who make more than $1 million a year in 2018, while 52.4 percent of the benefit will go to those who make more than $1 million a year in 2024.
The Hill added:
Republicans included a tax break for pass-throughs in the new tax law because they were also cutting the tax rate for corporations and wanted to level the playing field between corporations and small businesses. The measure includes some provisions designed to prevent wealthy individuals from using the new deduction to avoid taxes.
But Democrats have had concerns that the deduction would provide the biggest benefit for the wealthy and make taxes more complicated for many small-business owners.
The business community is eagerly awaiting IRS guidance on the new deduction because of its complexity.
Senate Minority Leader Charles Schumer (D-N.Y.) said in a statement that the JCT report provides “more evidence that the GOP tax bill was in fact designed to tip the scales in favor of the wealthiest Americans at the expense of middle-class families.”
However Ryan Ellis, a senior tax adviser for the Family Business Coalition, said that the JCT report also shows that much of the tax benefit goes to people who make less than $1 million a year, and therefore “argues against the Democrats’ principal narrative about the tax law.”
According to a new NBC News/Wall Street Journal poll, the GOP tax law has gotten less popular with voters ahead of this year’s midterm elections, with just 27 percent of Americans calling it a good idea.
Weekly employee earnings have grown $75 since the GOP tax law passed, well short of the $4,000 to $9,000 annual increases projected by President Trump and House Speaker Paul Ryan, per the latest Employment Situation report from the Bureau of Labor Statistics.
According to Americans for Tax Fairness, only 4.3% of workers will receive a one-time bonus or wage increase tied to the GOP tax cuts, while businesses received nine times more in cuts than what they passed on to their workers.