Friday, September 11, 2015

Wall Street Journal agrees: Top 1% Are Biggest Winners in Jeb Bush’s Tax Plan

By John D. McKinnon, WSJ

Jeb Bush has been highlighting the benefits of his new tax plan for the middle class, which in many cases are considerable. But by some measures the biggest winners would be – well, winners.

A new analysis by the business-backed Tax Foundation shows that the biggest percentage increases in after-tax income under Mr. Bush’s tax plan would go to the top 1% of earners, people making more than about $406,000. They would see their after-tax incomes increase on average by 11.6%, according to the analysis. That’s the biggest change for any income group.

The average for all income levels would be a 3.3% increase in income. The second-biggest beneficiaries would be folks in the top 10%, those making more than about $117,000. Their incomes would go up by 4.7%.

The benefits to the top 1% would be even higher when the full economic impacts of the change are considered, according to the Tax Foundation analysis.

To some degree, this result is expected, given Mr. Bush’s stated objectives. He’s trying to use his plan to boost anemic economic growth. And given the way economic models work, tax plans almost have to lower taxes on business- and investment-related income in order to get the desired growth effects. For good or ill, the top 1% tend to receive a lot of that kind of income, and thus benefit disproportionately from any tax reductions.

(More here.)

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