Congressional Republicans’ new tax plan would deliver a major boost to the top 1 percent of Alabamians — the middle class, however, not so much.
According to a new study released Wednesday by the Institute on Taxation and Economic Policy (ITEP), a nonprofit research organization based in Washington, D.C., Alabamians with incomes of more than $1 million would get an average tax cut of nearly $116,000 a year. Meanwhile, one in seven Alabamians would pay higher taxes under the plan.
Key Alabama findings from the ITEP report include:
- The top 1 percent of Alabama earners – those who make $501,800 or more – would receive 56.2 percent of the tax cuts going to the state.
- Nearly half, 49.2 percent, of the overall tax cuts that Alabama residents would get under the plan would flow to people with incomes of more than $1 million a year. They would receive an average annual tax cut of $115,900.
- 12.5 percent of the state’s total tax cuts would go to the three in five Alabamians with incomes of less than $57,900 a year. They would see an average tax cut of $190 a year.
- One in seven Alabamians, 14.5 percent, would pay higher taxes under the plan.
“These tax cuts would be a windfall for the wealthy at the expense of everyone else,” Arise Citizens’ Policy Project executive director Kimble Forrister said. “This plan likely would force massive cuts to future federal funding for Medicaid, education, housing, transportation and other vital services that help everyday families make ends meet. Congress should reject these reckless tax cuts for the rich and focus on investing in education, health care and other services that help all Alabamians and all Americans get ahead.”
A U.S. Senate Budget Committee is scheduled to vote soon on a federal spending plan that will lay the groundwork for tax cuts.