The hallmark of any Republican tax plan is that it showers a wildly disproportionate share of its benefits on the top 1 percent of households. And in this, their latest one is no different.
The only real innovation in the Senate bill is that it would start off merely tilted toward the well-off and the superwealthy, and end up almost exclusively helping them, in particular the people at the very top of the income ladder. There's a reason for this. The only way Republicans can make their corporate tax cuts permanent and still comply with the Senate rules that they not add to the deficit after 10 years is to make their individual tax cuts temporary, and then turn them into tax increases.
The result, according to the nonpartisan Tax Policy Center, is a bill that would become more regressive the more time passed. The top 20 percent of households would receive 63.2 percent of all the money from the Republican tax cuts in 2019, 63.7 percent in 2025, and a full 90 percent in 2027. But this isn't a story about upper-middle-class professionals getting a bigger and bigger slice of the tax cut pie. It's about wealthy investors doing so. As you can see below, the top 1 percent would see their share of the Republican tax cuts rise from 17.6 percent in 2019 to 22 percent in 2025 and 61.8 percent in 2027. That's because corporate tax cuts primarily benefit the people who own stock in companies, so a plan that became only one would help the rich the most.
There's another reason, though, that the top 1 percent would end up with so many of the total tax cuts. It's that a lot of other people would be getting tax hikes instead. Indeed, the Tax Policy Center thinks that the Republican plan would increase taxes on just over half of all households by 2027. That's when the plan's twice-as-big standard deduction, twice-as-big child tax credit and slightly lower rates would all go away, but its tax brackets that didn't grow as much as before — so that people would more easily get pushed into higher ones — stayed. The big picture is that 56 percent of all households between the 20th and 40th income percentiles would be paying more than 65 percent of those between the 40th and 60th would, and 58.9 percent between the 60th and 80th. Only 16.8 percent of all households within the top 1 percent, meanwhile, would face a tax increase at that point.
It's the Leona Helmsley theory of taxes: Only the little guy should pay them.
Republicans, of course, insist that these tax hikes would never actually happen, since, as Trump's budget director Mick Mulvaney put it, those increases are just about “trying to essentially manipulate the numbers and game the system.”
And they might be right. The Obama administration, after all, did end up extending the Bush tax cuts for everybody but the very rich. Still, though, Washington is full of things that were never supposed to happen. The sequester cuts were supposed to be so painful to both Republicans and Democrats that they'd come up with something to replace them. They didn't. And the Children's Health Insurance Program was supposed to be such a sacred cow that even Republicans would renew it without a hitch. They haven't. The point is that defaults are a powerful thing, and are especially so in as polarized a place as Washington.
Republicans know this. That's one of the reasons the tax cuts they care about are the permanent ones.