The current poverty line for a family of four is $26,200: People with incomes between $10,000 and $30,000 — nearly one-quarter of Americans — are among those scheduled to pay a higher average tax rate in 2021 than in years before the tax “cut” was passed. The C.B.O. and Joint Committee estimated that those with an income of $20,000 to $30,000 would owe an extra $365 next year — these are people who are struggling just to pay rent and put food on the table.
Of course, the poor have never mattered much to the Republican Party, but those on the edge of poverty have been particularly hard hit by the pandemic and the recession its caused, so Trump’s planned tax increases seem especially heartless, and impractical, when you consider that their higher tax payments, while a huge burden for them, will add little to the budget.
By 2027, when the law’s provisions are set to be fully enacted, with the stealth tax increases complete, the country will be neatly divided into two groups: Those making over $100,000 will on average get a tax cut. Those earning under $100,000 — an income bracket encompassing three-quarters of taxpayers — will not.
At the same time, Trump has given his peers, people with annual incomes in excess of $1 million dollars, or the top 0.3 percent in the country, a huge gift: The Joint Committee on Taxation estimated the average tax rate in 2019 for this group to be 2.3 percentage points lower than before the tax cut, saving the average taxpayer in this group over $64,000 — more than the average American family makes in a year.
The tax loss and benefit estimates just described were calculated before the pandemic. Now, incomes for almost everyone but top earners have taken a hit, so the loser group will likely be considerably larger than anticipated; and with people like Jeff Bezos, the billionaire chief executive of Amazon, doing even better than expected, Trump’s gift to him is even bigger.
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