Everyone is Missing This Detail in the Tax Plan

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While the Tax Policy Center and anyone with an ax to grind is out hammering the GOP and the President for giving the wealthy a bigger tax cut than the middle class, Chris Edwards says otherwise. Edwards, a friend of mine and director of tax policy studies at the Cato Institute, dials in on the tax plan, noting that while the wealthy are getting the largest average reduction in tax dollars paid to the government in the plan, as a percentage of taxes currently being paid, the Middle Class is getting the biggest cuts.

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He writes:

The TPC summary says, “Those with the very highest incomes would receive the biggest tax cuts,” and tables in the report encourage readers to come to that conclusion.

However, my parsing of TPC’s data reveals something different: the GOP plan would give the largest relative cuts to people in the middle. On average, middle-income earners would receive larger percentage tax cuts than higher-income earners.

The table shows data from TPC’s analysis and from its current law estimates released in March. Households are split into quintiles, or fifths, by income level. The columns titled “change” present the effects of the GOP cuts in different ways.

Chris Edwards discusses the GOP tax plan and 401(k) plans on CNBC’s Power Lunch

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.