After Decades of Costly, Regressive, and Ineffective Tax Cuts, a New Course Is Needed

This agreement made about 82 percent of the cost of the Bush tax cuts permanent.12 Trump Tax Cuts Created New Costly Tax Advantages for the Wealthy Like the Bush tax cuts, the tax cuts enacted in 2017 under President Trump benefited high- income households far more than households with low and moderate incomes. [...] The 2017 tax law will boost the after-tax incomes of households in the top 1 percent by 2.9 percent in 2025, roughly three times the 0.9 percent gain for households in the bottom 60 percent, TPC estimates.13 The tax cuts that year will average $54,220 for the top 1 percent — and $220,310 for the top one-tenth of 1 percent. [...] For example, the law lowered statutory tax rates at all income 5 levels, nearly doubled of the size of the standard deduction from $13,000 to $24,000 for a married couple in 2018, and doubled the size of the Child Tax Credit for many families.29 Yet other provisions raised taxes on families, such as the elimination of personal exemptions and the new, permanent inflation adjustment for key tax para. [...] The expiring provisions primarily benefiting affluent households — the cut in the top tax rate, the pass-through deduction, the weakened AMT, and estate tax cuts — account for a majority of the total cost of extending the law’s expiring provisions.31 Extending the individual income tax and estate tax provisions would boost after-tax incomes for the top 1 percent more than twice as much as for the. [...] These tax cuts include the amount by which the tax cuts increased the cost of raising the threshold for the alternative minimum tax (AMT).