The tax reform framework released by the Trump administration and Congressional Republican leaders on September 27 would affect states differently, but every state would see its richest residents grow richer if it is enacted, according to this new report from the Institute on Taxation and Economic Policy.
One in six taxpayers would see a tax increase under this regressive tax shift.
Nationally, more than two-thirds (67 percent) of the tax cuts contained in the framework would go to the richest one percent of Americans in 2018. The middle fifth of households, people who are literally the “middle-class,” are projected to earn between $41,000 and $66,000 in 2018. These households would receive an average tax cut of just $410 next year, which would increase their incomes by an average of just 0.8 percent.
This West Virginia Center on Budget and Policy blog looks at how the GOP tax framework will impact West Virginians. In the Mountain State, the richest one percent of residents would receive 39.1 percent of the tax cuts within the state under the framework in 2018, according to Institute on Taxation and Economic Policy. These households, with incomes of at least $358,800, would receive an average tax cut of $27,800 in 2018. The framework is especially beneficially to those earning more than $1 million. These households represents 0.1 percent of the state’s population but would receive 22 percent of the tax cuts if the plan was in effect next year.
In contrast, West Virginia’s middle-class would receive just 7.3 percent of the tax cuts that go to West Virginia under the framework. In 2018 this group is projected to earn between $33,500 and $52,700. The framework would cut their taxes by an average of just $260.