Not everyone benefits equally from the tax legislation that House Republicans unveiled Thursday.
GOP leaders toiled for weeks to decide what deductions and tax breaks should be axed to pay for the tax cuts. That means the bill creates some winners and some losers.
Republicans say their plan will simplify the code and provide tax relief to middle-class families.
Speaker Paul Ryan (R-Wis.) repeatedly touted an example on Thursday of how a family of four earning the median American household income of $59,000 would save $1,182 a year on their taxes, using the proposed doubled standard deduction, reduced tax rate and expanded child tax credits.
But Democrats argue that most of the benefits of the GOP tax proposal will flow to the ultra-wealthy and corporations.
Here’s a look at who stands to gain and who stands to lose out.
Corporations would get a big tax cut from the GOP’s proposal. The corporate tax rate would go down from the current rate of 35 percent to 20 percent.
Republicans say it’s imperative to lower the U.S. corporate tax rate, the highest among other advanced countries, to attract more businesses.
Companies would also be allowed to deduct the full costs of buying new equipment for five years. And businesses that had been keeping profits overseas to avoid the 35 percent tax rate would be able to bring the money back, or repatriate, to the U.S., and pay only a 12 percent tax for cash assets.
The Business Roundtable, a group of CEOs, threw its support behind the tax plan.
“While the tax-reform bill released today deserves close analysis, it is significant progress toward achieving these goals,” said Jamie Dimon, chairman and CEO of JPMorgan Chase & Co. and chairman of Business Roundtable.
Major business groups
Leaders in the business community have been pushing tax reform for years, and they generally liked what they saw.
Key players, such as the U.S. Chamber of Commerce and the National Association of Manufacturers, spoke positively of the bill. They back provisions to lower rates for businesses, to move to a “territorial” tax system that exempts dividends from companies’ foreign subsidiaries, and to enhance expensing of capital investments.
“This is absolutely a positive first step,” said Caroline Harris, vice president of tax policy at the Chamber.
While most large business groups praised the bill, there was a notable exception. The National Federation of Independent Business said it couldn’t support the bill in its current form because it doesn’t help small businesses enough.