Study: Most Would Be Worse off Under GOP Tax Plans
According to a recent study, most individuals would be worse off under the various tax plans of the GOP candidates.
The Hill reports:
The tax plans from Donald Trump, Marco Rubio and Ted Cruz would each cost trillions of dollars over 10 years, and the United States is already projected to face large budget deficits. As a result, the candidates’ tax plans, if enacted, would inevitably lead to spending cuts and/or tax increases, CTJ said in a report released Wednesday.
“As this report shows, when those inevitable spending cuts and tax increases are taken into account, the vast majority of Americans will end up as big losers,” the group said.
CTJ’s analysis assumes the candidates’ tax cuts would be paid for by equally cutting spending and raising income taxes across-the-board. This is similar to what happened after then-President Ronald Reagan cut taxes in 1981, according to the report.
Under CTJ’s model, each person would see the same dollar “cost” from the spending reductions, while tax increases would be allocated based on the overall personal income distribution, the group said.
Without considering offsets, CTJ estimates that the tax plans from Trump and Rubio would cut taxes for all, though they would cut taxes the most for the wealthy. However, only the top 5 percent of taxpayers would receive net benefits from the plans when factoring in pay-fors.
Taxpayers in the bottom 20 percent of income would on average receive a net income loss of $2,541 under Trump’s plan and a net loss of $1,563 under Rubio’s plan once the pay-fors of tax increases and spending cuts are considered, according to CTJ.
The group estimates Cruz’s tax plan would increase taxes on those in the bottom three fifths of income even without considering pay-fors. When the impact of future spending cuts and tax increases are taken into account, only those in the top 20 percent would receive net benefits. Taxpayers in the bottom 20 percent would receive net income losses of $6,234, according to the report.
The report did not mention presidential hopeful John Kasich.
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