Graph depicting Effect of the Republican Tax Plan by Income Bracket
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Description: This graph shows how much additional national debt each working person would accumulate per year under the tax proposal put forward by the House Republicans in 2017 and compares that amount to the tax savings people in each income bracket would see under that plan.

Sources: Tax Policy Center

Data: Excel

Last updated: February 20, 2017


Effect of the Republican Tax Plan by Income Bracket

Discussion: Republicans focus on the direct savings people see when they receive a tax cut, but to actually understand the full impact a tax cut has on your financial situation, you must also consider the additional borrowing that is done in your name in order to facilitate that tax cut.

While the benefit of tax cuts is highly concentrated among those with higher incomes, the burden of the national debt is not differentiated based on income. The burden created by national debt may ultimately take the form of cuts in public spending, for example, which may harm all Americans equally or even harm lower-income Americans disproportionately heavily.

Americans in the middle income quintile can expect to save $260 a year in taxes from the Republican plan, but would take on slightly more than 10 times that much in additional national debt each year. Americans in the top 0.1% would also take on $2,682 per year in additional national debt, but would save $1,262,530 per year on their taxes on average. Even within the top quintile, only the people in the top 5% would benefit from the Republican tax plan.

The estimated impact on the national debt per year is the dynamic scoring estimate, meaning that number has already included any positive economic impacts. The static scoring estimate is slightly higher. The figure is the average of the amount expected to be added during the first 20 years per American who works 35 or more hours per year.

Put more simply, what the Republicans are proposing to do is to take approximately $2,000 a year from 95% of Americans and give it to the highest-income 5%, with the payouts heavily concentrated in the top 1%.

See more graphs about: Taxes  

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