The report comes one day after National Economic Council Director Gary Cohn (left) said “the wealthy are not getting a tax cut under our plan,” and Treasury Secretary Steven Mnuchin (right) said the plan would generate so much economic activity that it would pay for itself. | Brendan Smialowski/AFP/Getty Images Wealthy, not middle class, would be big winners in GOP tax plan, study says About 30 percent of those earning between $50,000 and $150,000 would pay more under the Republican plan, according to the nonpartisan Tax Policy Center.

The top 1 percent would be the biggest winners under Republicans' plans to rewrite the tax code, according to a new analysis, while some moderate-income people would face tax increases.

Though the administration says the wealthy would not see their taxes go down under the proposal, the Tax Policy Center said Friday that they would actually reap the biggest cuts — about half of all the tax benefits in the GOP plan. In 2018, the wealthiest 1 percent would take home a $129,000 tax cut, the group found, boosting their after-tax incomes by 8.5 percent.


Most other people would see their taxes decline as well, albeit not by nearly so much. Those in the center of the income spectrum would see a $660 tax cut, the group said, which translates into a 1.2 percent increase in after-tax income.

By 2027, about 30 percent of those earning between $50,000 and $150,000 and 60 percent of those taking home between $150,000 and $300,000, would pay more under the Republican plan.

The proposal released this week by the "Big Six" congressional and White House negotiators would cost $2.4 trillion over the next decade, the non-partisan TPC said. It also found the plan, in aggregate, would raise taxes on individual taxpayers while cutting them for businesses — a politically perilous combination for lawmakers.

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The assessment — which included a number of assumptions about how the GOP plan would work — undercuts Republicans’ assertions that their plan is focusing on helping the middle class, not the well-to-do, and hands Democratic critics reams of ammunition.

Mark Mazur, head of the group, pointed to GOP plans to eliminate the estate tax and alternative minimum tax, as well as its plans to cut the top income tax rate and the levy on so-called pass-through businesses, which pay taxes through the individual tax code.

“All of those things benefit high-income individuals either exclusively or largely, and so it’s hard to see how, if you continue to have those provisions in a tax reform proposal, that doesn’t benefit high-income individuals and high-income households disproportionately," said Mazur, who was Treasury assistant secretary for tax policy in the Obama administration.

The report comes as Republicans argue their plan is focused on average Americans.

"Our framework ensures that the benefits of tax reform go to the middle class, not the highest earners," President Donald Trump told the National Association of Manufacturers Friday.

On Thursday, National Economic Council Director Gary Cohn said "the wealthy are not getting a tax cut under our plan," while Treasury Secretary Steven Mnuchin said it would generate so much economic activity that it would pay for itself.

Republicans on Friday slammed the TPC report.

"This belongs in the fiction aisle," said White House spokeswoman Sarah Sanders. "The Tax Policy Center analysis is useless and misleading because the unified framework does not include details that are necessary to determine either the cost or distributional effects of the framework. They either ignore — or use inaccurate assumptions — about important proposals like the size and availability of the child tax credit and other provisions."

But it gave Democrats grist to attack the tax plan.

"While the administration continues to peddle false claim after false claim, nothing can hide the truth that the only individuals benefiting from this plan are the president, his family and his high-flier friends," said Sen. Ron Wyden, the top Democrat on the Finance Committee.

Republican leaders on Wednesday released their long-anticipated framework for rewriting the tax code. It called for slashing the corporate rate to 20 percent, from 35 percent, while cutting taxes on unincorporated pass-through businesses to 25 percent. They also called for doubling the standard deduction and increasing a popular child tax credit, among many other changes.

The analysis comes even as Republicans rewrote their plan to avoid giving so much to the wealthy. Though they had campaigned last year on steep tax cuts for the highest earners, Republicans tried to reverse course — in order to head off Democratic attacks — in part by scuttling plans to cut the capital gains tax and floating the idea of a surtax on the rich.

Earlier this week, a senior administration official told reporters: “We are committed to making sure the tax code is at least as progressive as the existing tax code, that it does not shift the tax burden from high-income to low- and middle-income taxpayers.”

The Tax Policy Center said Republicans could conceivably offset the tax cuts for the wealthy with a proposal to create a new, higher income tax bracket for the rich, but because they did not include any details on how it might work or if it definitely will be part of Republicans’ plans, the group did not include it in their analysis.

The group pointed to several reasons why some could see their taxes go up under the plan. First, Republicans want to replace the personal exemption -- which is designed to adjust tax burdens for family size -- with a beefed-up child tax credit. The issue there is that the personal exemption grows with inflation while the child credit does not.

Secondly, Republicans want to eliminate most itemized deductions, including one for state and local taxes, which would squeeze some upper-middle class people who wouldn't benefit from other cuts, such as plans to expand the standard deduction. Also, the plan would index the tax brackets for a slower gauge of inflation, which means that over time people would get pushed into higher tax brackets more quickly.

Overall, the plan would cut taxes for businesses by $2.6 trillion over the next decade. Killing the estate tax and gift taxes would cost another $240 billion. The changes to the individual side of the code would raise taxes by $470 billion.

That’s sure to give some lawmakers pause. Many Republicans will be wary of being seen as more concerned with the taxes of big corporations than their constituents', and, historically, lawmakers have been careful to pair cuts in business taxes with much larger reductions for individual taxpayers. The landmark 1986 tax reform raised taxes on corporations in order to finance tax cuts for individuals.

Republicans omitted many of the specifics of how the plan would work, including things like where the different income tax brackets would kick in and by how much they want to increase the child tax deduction. They plan to increase the total size of the break, as well as loosen its eligibility rules, but said those details would be sorted out by congressional tax-writing committees.

So the Tax Policy Center made various assumptions about how the plan would work. It assumed the maximum child tax credit would grow to $1,500 from the current $1,000, and that the individual income tax brackets would begin at the same levels as House Republicans proposed in the tax-reform “blueprint” they unveiled last year.

The report did not include a so-called dynamic analysis, assessing how the Republican plan would affect the economy. That will be ready in about a week, the group said, while adding, “We would expect the framework to have little macroeconomic feedback effect on revenues over the first decade.”

