House GOP tax plan would cost $4T: analyst

House GOP tax plan would cost $4T: analyst
© Moriah Ratner

The House Republican tax-reform plan would cost $4 trillion over a decade and largely benefit taxpayers in the top 1 percent of income, the liberal Citizens for Tax Justice (CTJ) said in a report Wednesday.

The plan's individual income tax changes would cost $1.2 trillion, the corporate tax changes would cost $2.5 trillion and the estate tax changes would cost $300 billion, according to the CTJ.

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The House GOP blueprint, part of the election-year "Better Way" agenda from Speaker Paul RyanPaul Davis RyanHouse Ethics Committee informs Duncan Hunter he can no longer vote after guilty plea Duncan Hunter pleads guilty after changing plea Trump campaign steps up attacks on Biden MORE (R-Wis.), would lower the top individual tax rate from 39.6 percent to 33 percent and would cut the corporate tax rate from 35 percent to 20 percent. It would repeal the estate tax.

House Republicans intended the blueprint to be revenue-neutral once the economic effects of the plan are considered.

The CTJ said that under the plan, the top 1 percent would receive an average annual tax cut of $137,780. The tax cuts for the top 1 percent comprise 60 percent of all of the individual tax cuts.

While taxpayers in all income groups would receive tax cuts, the reductions for middle- and lower-income taxpayers would be much less. Those in the middle fifth of income would receive annual tax cuts averaging $753, while those in the bottom fifth of income would on average get tax cuts of $107 a year, according to the report.

When the spending cuts needed to offset the tax cuts are considered, only taxpayers in the top 5 percent of income would be better off under the plan, the CTJ said.

"The individual tax cuts are extremely regressive because Ryan’s plan would repeal or sharply reduce two taxes that fall exclusively or mostly on the best-off Americans — the federal estate tax and the corporate income tax — while also slashing personal income taxes on investment income such as capital gains and dividends, which mostly go to the highest earners," the CTJ said.

The CTJ did not score the blueprint's proposal to tax imports and exempt exports because it thinks the proposal would violate treaties. The group said that if the proposal was scored, it would increase the blueprint's revenue loss.

But Scott Greenberg, an analyst at the free-market Tax Foundation, said on Twitter that the plan's treatment of imports and exports would increase revenue because the U.S. imports more goods than it exports.