Public Assets Institute > Press > Press Releases > US HOUSE TAX PLAN: BENEFIT FOR VERMONTERS AT THE TOP GROWS OVER TIME

US HOUSE TAX PLAN: BENEFIT FOR VERMONTERS AT THE TOP GROWS OVER TIME

Tax cuts for the top 1 percent are 200 times larger than those for the poorest

A 50-state analysis of the House tax plan released this week by the Institute of Taxation and Economic Policy (ITEP) reveals that the wealthiest 1 percent of Vermonters would receive the greatest share of the total tax cut in year one and their share would grow through 2027.

The House leadership continues to tout this tax proposal, which will increase the federal deficit by $1.5 trillion over the next decade, as a plan to boost the middle class. But a closer examination of the bill’s provisions reveals that it is laser-focused on tax cuts for the nation’s highest earning households.

“While this bill may cut taxes for some low- and middle-income households, it also raises taxes on some of these families and many may see no benefit at all. But let’s be clear: This proposal will primarily benefit those at the top in Vermont and across the nation,” said Paul Cillo, President of Public Assets Institute.

“These tax cuts will add to the nation’s annual deficits and come at the expense of low- and middle-income families who will likely lose more from cuts to education, health care, infrastructure, or other public services than they gain from the small cuts they would receive.”

The wealthiest Vermonters’ share of the tax cuts would grow over time due to phase-ins of tax cuts that mostly benefit upper income taxpayers and the eventual elimination or erosion in value of provisions that benefit low- and middle-income filers. For example, after five years, the bill eliminates a $300 non-child dependent credit that benefits low- and middle-income families while fully repealing the estate tax in year six for the very large estates subject to the tax.

More specifically, the share of the tax cut enjoyed by the top 1 percent of Vermont households would increase from 20 percent in 2018 to 29 percent by 2027 with an average cut of $45,990 at the end of the 10 years.

Following are some highlights of how the plan affects Vermont:

  • The average tax cut for the top 1 percent would be $28,840 in 2018, versus $140 for the poorest 20 percent.
  • The top 1 percent would see an average tax cut of 2.7 percent of their income in 2027, while the share for the poorest 20 percent is only .6 percent of their income.
  • The cut for the middle 20 percent would be 1.2 percent of their income in 2027.

To read the entire ITEP report or get more details about the implications for Vermont go to http://itep.org/housetaxplan

Public Assets Institute is a nonpartisan nonprofit located in Montpelier. Reports based on its research and analysis are available on its website www.publicassets.org.

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For more information contact Stephanie Yu at steph@publicassets.org or 802-223-6677.

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