The tax plan revealed by GOP leaders this week would primarily benefit the top 1 percent of earners, analysis by the Tax Policy Center has found.
The nonpartisan organization says the tax cuts proposed by the Trump administration and Congressional Republicans would reduce federal tax revenue by $2.4 trillion over the next decade.
But it's the wealthiest Americans who stand to gain the most from the "Unified Framework for Fixing Our Broken Tax Code," the TPC says, with around 50 percent of the tax cuts benefiting the top 1 percent of earners.
If implemented in 2018, the top 1 percent of earners would see an 8.5 percent boost in their after-tax incomes compared to the current system, earning them an extra $130,000. Meanwhile the mega-rich – the top 0.1 percent – would get a 10.2 percent boost worth $730,000 a year.
The middle classes meanwhile would only see a 0.5-1.2 percent increase in their after-tax income, worth $440-$660 a year.
Some would actually stand to lose money in the long-run, with the Tax Policy Center finding that by 2027, some 30 percent of households earning between $50,000 and $150,000, and 60 percent of those earning between $150,000 and $300,000, would actually pay MORE in taxes.
The wealthiest Americans would benefit in particular from the simplified income tax brackets, which reduce the top tax rate from 39.6 percent to 35 percent, as well as the proposed abolition of estate taxes and a huge cut in corporate tax from 35 to 20 percent.
The plan would also repeal the Alternative Minimum Tax that is designed to ensure higher earners can't take advantage of deductions to pay minimal tax (though AMT has been criticized for catching more and more middle earners in its net in recent years).
The nation's lowest earners might end up having to pay a higher income tax rate, with the bottom rate proposed to increase from 10 to 12 percent, Forbes reports.
However, this would likely be offset by the doubling of the standard deduction to $12,000 for individuals or $24,000 for couples, meaning they'd likely pay less tax overall.