by Ernie Tedeschi as linked by Paul Krugman points to an interesting author. The math is in follow up post.: Many parents face higher taxes under TCJA, even if Congress makes its credits permanent This quick post looks at the effects of the Tax Cut and Jobs Act (TCJA, the House GOP’s proposed tax plan introduced last week), but (selfishly) I focus on a specific segment of the population: families with children under 18. It turns out that parents do far worse under the TCJA than the population as a whole, and making the expiring credits in the TCJA permanent only modestly changes this story. More than 40% of families with children face a hike under TCJA in 2027, even with the security of permanent filer credits and assumptions about the benefit of corporate
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Ernie Tedeschi as linked by Paul Krugman points to an interesting author. The math is in follow up post.:
Many parents face higher taxes under TCJA, even if Congress makes its credits permanent
This quick post looks at the effects of the Tax Cut and Jobs Act (TCJA, the House GOP’s proposed tax plan introduced last week), but (selfishly) I focus on a specific segment of the population: families with children under 18.
It turns out that parents do far worse under the TCJA than the population as a whole, and making the expiring credits in the TCJA permanent only modestly changes this story. More than 40% of families with children face a hike under TCJA in 2027, even with the security of permanent filer credits and assumptions about the benefit of corporate tax cuts.
As always, I’m using the excellent Open Source Policy Center (OSPC) TaxBrain model for this analysis.
To set the table: under the TCJA as written (what I’m calling “TCJA law”), 72 million filers or about 37% of the total get a direct tax increase in 2027. This number falls to 50 million, or 26%, if I distribute the benefit of TCJA’s corporate tax cut similar to how JCT did in their score of TCJA last week. [1]
But filers with children under 18 fare much worse than the overall population. In 2027 I estimate that there are 24 million families with kids who see a direct tax hike, 55% of all such families. Distributing the corporate tax cut lowers this by 4 million to 20 million, or 45% — still a far higher proportion than all filers writ large.