Senior Director of Federal Tax Policy
While imposing harsh budget cuts on the most vulnerable Americans, House Budget Committee Chairman Tom Price’s budget plan also appears to reflect a continuing drive to cut taxes for the nation’s highest-income people. Unlike past years’ House budgets, this plan doesn’t specify a top tax-rate target of 25 percent. It claims, more generally, that it “substantially lowers tax rates for individuals.” Still, other details of the plan clearly indicate tax priorities that favor high-income households:
We estimate that repealing health reform and the AMT would likely reduce revenues by more than $1 trillion over ten years, based on Tax Policy Center (TPC) and Congressional Budget Office estimates. While it’s intended to be revenue neutral compared to current law, Chairman Price’s budget proposes no specific offsets to pay for these provisions (or for the tax-rate cuts it calls for in general terms, which tend to be very costly). Repealing the AMT and health reform’s high-income provisions would provide a windfall at the top while doing little for middle-class households. Based on a TPC distributional analysis of the AMT and of health reform’s high-income provisions in 2015, we estimate that repealing these provisions would:
Accounting for eliminating health reform’s premium tax credits and other revenue provisions wouldn’t alter the conclusion: the specific tax proposals identified in the Price plan would direct large tax cuts to high-income earners and little to low- and middle-income filers. While the tax component of Chairman Price’s plan is less detailed than the tax proposals in past years’ House budgets, the information it provides strongly indicates that the plan would juxtapose deep spending cuts primarily hitting low- and middle-income people with tax changes likely to heavily favor people at the top of the income scale.