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Friday, October 6, 2017

Report: GOP tax framework offers most benefit to Louisianans making $568,200 a year

Posted By on Fri, Oct 6, 2017 at 4:47 PM

click to enlarge IMAGES MONEY / CREATIVE COMMONS 2.0

In a new report that analyzed the nine-page tax reform framework released Sept. 27 by Congressional Republican leadership, the nonprofit Institute on Taxation and Economic Policy (ITEP) found that 63.7 percent of the framework's tax cuts would go to Louisiana households making $568,200 or more per year.

According to the report, these households comprise the top 1 percent of the state's income distribution and would receive an average tax cut of $97,200. Families making $1 million or more would get a tax cut of $256,000 if the framework's proposed changes were enacted for tax year 2018.

Louisiana households making between $38,300 and $59,500 would receive an average tax cut of $380, ITEP found. (Median household income in Louisiana was $45,047 in 2015, according to U.S. Census data.) In this state, 11.8 percent of households would see a tax increase.

The report was based on a series of assumptions drawn from the United Framework for Fixing Our Broken Tax Code, which proposes several changes to current tax law including doubling the standard deduction, the repeal of personal exemptions and the Alternative Minimum Tax, a reduction in the number of tax brackets from seven to three, a repeal of the estate tax (called the "death tax" in the document) and reductions in the corporate income tax rate, where "the bulk of the benefits would go to the owners of corporate stocks ... a group of overwhelmingly (although not entirely) high-income taxpayers," ITEP wrote.

The organization's analysis appears as Congressional representatives look to the framework as a guide to draft tax reform legislation, which House Majority Whip Steve Scalise recently told Fox News lawmakers "have to deliver" on.

Some Louisiana lawmakers have voiced support for aspects of the framework, but most issued more general statements and social media posts calling for reform, arguing that the current tax code is outdated, stifles growth and is overly complex. "Our federal tax code is more than 60 times longer than the Bible, and it contains none of the Good News," House Rep. Mike Johnson said in a news release.

In recent weeks, U.S. Sen. John Neely Kennedy tweeted several times in support of tax reform and wrote an op-ed advocating for the doubling of the standard deduction.

"What we have right now in America is too many undeserving people at the top getting bailouts and too many people at the bottom getting handouts," Kennedy wrote. "Middle-class families ... can't afford it any more."

Some have argued that the middle-class gains from a doubled standard deduction, as proposed in the framework, would be negligible when considering other eliminated deductions and exemptions.

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