Poor would get little in proposed tax package

Associated Press

WASHINGTON

President Donald Trump promised Americans “the largest tax cut in our country’s history.” But for low-income households, Trump’s plan would amount to crumbs.

The poorest would get an average tax cut of about $60 a year, according to an analysis by the Tax Policy Center. Middle-income families would get about $300 on average.

“There’s no significant benefit for low-income families,” said Elaine Maag, a senior research associate at the Tax Policy Center. “It’s important because when low-income families get money they tend to spend it, putting it right back into the economy. High-income families tend to save it.”

Republicans have backed a budget resolution that would enable Congress to pass a tax package that could add up to $1.5 trillion to the national debt over the next decade.

The Tax Policy Center’s analysis says most of the tax cuts would go to the wealthiest Americans. For example, the top 1 percent – families making about $700,000 a year – would get an average tax cut of $129,000. Tax breaks targeting the wealthy include lowering the top income tax rate from 39.6 percent to 35 percent, eliminating the alternative minimum tax and doing away with the federal estate tax, which is only paid by people who inherit multimillion-dollar estates.

Congressional Republicans dispute that their plan would ultimately help wealthy families more than it would help the middle class. They note that the plan unveiled by Trump and GOP leaders last week is incomplete. The plan would reduce the number of tax brackets from seven to three, but it doesn’t include the income levels for each tax bracket.