Tech industry supports GOP tax plan

Henrietta Strickland
September 30, 2017

The analysis shows that the elimination of state and local tax deductibility will mean that 3.3 million NY taxpayers would see their federal income tax liability increase by $17.5 billion.

But TPC said the plan if enacted into law, would devastate middle class Americans Trump said the plan was created to help - it would increase their tax burden by 28 percent.

Over time, about a quarter of taxpayers would see their income taxes rise by 2027.

And, if enacted, the package would blow a $2.4 trillion hole in the federal budget.

Although much of the tax plan has not been fleshed out by tax writing authorities, the 9-page framework released by Congressional Republicans includes the elimination of some popular tax deductions enjoyed by poor and middle class American families.

The plan would cost $2.4 trillion over 10 years.

The Tax Policy Center noted that its analysis was preliminary, based on a proposal that itself lacked key information, such as the proposed income brackets that would correspond to the three new tax rates Republicans envision replacing the current seven. Federal revenues would fall by $6.2 trillion over the first decade before accounting for added interest costs.

Tech industry supports GOP tax plan
Tech industry supports GOP tax plan

Based on the available details, the center estimates that the top 1 percent of households, or those making more than $730,000, will get an 8.5 percent tax windfall - or about half of the total cuts provided by the plan.

Most, but not all, taxpayers would get a moderate tax cut next year.

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The top 1% would benefit far more than everyone else.

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Individuals earning $150,000 to $300,000 a year would also get hammered by the tax plan. While those making less than about $150,000 would get an average tax cut of 0.5 percent or less, those making between $150,000 and $300,000 would pay, on average, $800 more. By 2027, 60 percent of them would see their taxes rise by about $4,000, according to the tax center. For larger households, the tradeoff might leave them worse off. The expanded tax credits for dependents are not indexed for inflation, so their value would decrease in the coming years.

The deduction for state and local taxes paid is the most widely used benefit in the tax code.

The GOP plan cuts the corporate tax rate from 35 percent to 20 percent, which tech companies say will help them be more competitive and innovative in the global marketplace. That means the individual would move to a higher bracket more quickly than with the more conventional inflation measure. It would also lower federal revenues by $6.2 trillion over the first 10 years.

Other reports by Click Lancashire

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