The Senate's latest tax plan would lavish billions of dollars in tax cuts on the wealthiest Americans but leave those at the bottom of the income ladder with higher taxes. That's what the latest estimate shows from the Joint Committee on Taxation, released Thursday as the House was set to vote on a separate version of a tax overhaul. Under the Senate plan, all income groups would get big tax cuts early in the coming decade, according to the committee's estimates. But by 2021, households making $10,000 to $30,000 would see their taxes go higher than if Congress did nothing.
The increases are due in part to the phaseout of the tax cuts for individuals beginning in 2025. And in order to stick to Senate rules limiting the 10-year impact on the federal deficit, all income groups would see their taxes jump in the final year of the plan. But the committee's estimate also looked at the impact of the repeal of the Affordable Car Act's individual mandate that requires households to buy health insurance. And if lower-income households choose not to buy insurance, many will lose government tax credits that help them cover the cost of insurance premiums. "Without those credits, they see an overall uptick in their tax liability," said Senate Finance Committee Chairman Orrin Hatch, R-Utah. "Nothing in our (bill) will impact the availability of premium subsidy credits." Here's how the tax cuts would be distributed out over the next decade, according to the Joint Committee on Taxation.
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