Let’s take a look.

The Facts

As we have noted before, the wealthiest Americans pay most of the federal income taxes. So, naturally, any reduction in tax rates is going to mostly benefit wealthier Americans. The House plan does expand a child tax credit and double the standard deduction to shift some tax savings to working Americans. Even so, any broad-based reduction in taxes is still going to mostly benefit the wealthy.

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According to Treasury Department data, the top 10 percent of income earners in 2016 paid 80 percent of individual income taxes. The top 20 percent paid 94.8 percent. The top 0.1 percent paid an astonishing 24.5 percent of federal income taxes.

Second, what’s a definition of “rich”? As the New York Times Upshot reported, people define “rich” depending on how much money they make. A YouGov survey found that households earning between $30,000 and $60,000 believe “rich” was $394,000 — while households making above $120,000 thought it was $501,000. Given Trump’s claimed wealth, he might define “rich” as even higher.

Both the nonpartisan Joint Committee on Taxation (JCT) and the Tax Policy Center (TPC) have published analyses of how the tax cut would benefit taxpayers in the highest income brackets — $1 million a year or higher. As expected, they tend to do better than other income groups.

Here, TPC shows that by 2027 the top 0.1 percent ($5 million and above) would experience the biggest percentage change in after-tax income and the biggest change in the average tax rate. The top 1 percent (about $1 million) would get 47 percent of the total reduction in taxes.

The JCT analysis (which does not include the impact of the estate tax repeal) shows how the taxpayers with incomes over $1 million would see their tax cuts grow over the course of the tax bill, from 2019 to 2027, while all other income groups would see their tax cuts dwindle or even turn into tax increases. (This is mainly because of expiring provisions for the middle class that Republicans claim would be retained in future tax bills, but there’s no guarantee.)

TPC came to a similar conclusion, showing the after-tax income went up for the top 0.1 percent over the course of the bill, while it shrank for every other income group.

Not everyone in the upper echelon is a winner. TPC found that nearly 31 percent of the tax units in the top 0.1 percent would face a tax increase — but that’s about the same as every other income group except for the lowest-income taxpayers.

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Those are the broad parameters. Clearly the rich do rather well. Now let’s look at some of the specifics.

Alternative Minimum Tax repeal. The AMT increasingly has snared families in the upper middle class, especially if they live in high-tax states or have many children. The House bill calls for eliminating the itemized deduction for state and local taxes (except property taxes), as well as the personal/dependent exemptions, which are key add-ons when calculating the AMT. So it’s possible that for many people it would be a wash, or even a net loser, depending on whether a tax filer lives in a state with high taxes.

But for the rich, especially the uber-rich, the AMT can be a real burden. In 2014, the top 400 taxpayers paid nearly $700 million because of the alternative minimum tax, nearly 2.5 percent of the total, according to IRS records. The one recent tax return of President Trump that has leaked — for 2005 — shows his tax bill increased $31 million because of the AMT.

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Repealing the AMT would reduce revenue by nearly $700 billion over 10 years, according to the JCT.

New pass-through rate. This sounds arcane, but it could mean big gains for passive investors, including more than 500 Trump entities, according to our colleague Steven Mufson. The JCT says the provision, which will slash the top rate from 39.6 percent to 25 percent for pass-through entities, will reduce revenue by $448 billion over 10 years.

A host of small and medium businesses — including service providers such as doctors, lawyers, dentists, architects and accountants — would be blocked from obtaining any benefit. But it would be a boon for NFL owners and also Jeffrey P. Bezos, currently the world’s wealthiest man and owner of The Washington Post (which is part of a pass-through entity called Nash Holdings). The billionaire Koch Brothers would also benefit. Officially, the House bill would levy a 39.6 percent rate on incomes of couples over $1 million, but this provision would allow the rich to sidestep that rate and instead be taxed at a much lower rate.

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Estate tax repeal. Trump conceded this point but suggested it was necessary because the rich do so poorly otherwise. As The Fact Checker reported, however, the estate-tax provision is even more generous than Trump’s own campaign plan. That’s because it essentially allows heirs to avoid paying any taxes on gains in value that took place when an asset was held by a decedent. So potentially tens of billions of untapped capital gains would remain beyond the reach of the U.S. government. Repealing the estate tax, paid by just 5,500 estates a year, would reduce revenues about $35 billion a year after it takes effect in 2024, according to JCT.

The White House did not respond to a request for comment.

The Pinocchio Test

Contrary to the president’s claim, the tax plan is not “so bad” for the wealthy. In fact, no matter how you slice it, the superwealthy do rather well under the House GOP proposal. As we have said, that’s largely because they already pay a large chuck of income taxes already.

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Trump could actually make the distribution tables look better if he pushed to keep the AMT in place for incomes above $1 million and the estate tax in place for estates larger than $11 million. The failure to do so underscores the fact that this tax plan is not only for the middle class.

Four Pinocchios

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