One key assessment is what happens to after-tax income. That’s a measure economists use to assess an income group’s well-being once tax changes are made, said Martin Sullivan, chief economist of Tax Analysts.
And it’s one way to measure how progressive tax changes would be. The more after-tax income rises for low- and middle-income households as a result of those changes, the better off they’ll be.
To see how middle-income and other households might fare under the Senate bill, CNNMoney calculated after-tax income changes using distribution tables created by the Joint Committee on Taxation, the nonpartisan tax scorekeeper for the House and Senate. – CNNMoney (New York) First published November 17, 2017: 5:17 PM ET
Here’s how the numbers break out from year to year:
In 2019: Every income group would end up with more after-tax income. Those making between $50,000 and $75,000 would see theirs rise by 1.3%, less than the 3% jump for those making between $500,000 and $1 million, or the 2.1% bump for households making more than $1 million.
In 2021: The $200,000 to $500,000 income group would do best, seeing a 2% rise in after-tax income. But those making $40,000 to $50,000 would only see a 0.5% bump. Those making $50,000 to $75,000 again get a 1.3% increase, just a little below the 1.5% jump in after-tax incomes for those making $1 million or more.
In 2023: The $30,000 to $40,000 band would see zero change while those making less would actually see slightly less after-tax income than they would if no tax changes were made.
Groups making $40,000 or more would have a little more money after paying Uncle Sam. But those who would enjoy the biggest bumps are those making from $500,000 to $1 million (2%) and those making $200,000 to $500,000 (1.6%).
In 2025: Those making $30,000 to $40,000 would see zero change in their after-tax income while those making less would see a less than 1% drop in their after-tax incomes.
By contrast, those making between $500,000 and $1 million would see a 2% jump.
And those making $50,000 to $75,000 along with those making more than $1 million would get less of a pop, at 0.8%.
In 2027: Every group would experience drops in average after-tax income or no change, except for those at the high end. Households bringing in $500,000 or more would see tiny increases of less than 0.5%. – CNNMoney (New York) First published November 17, 2017: 5:17 PM ET