President Obama’s new tax plan may end up hurting more than helping.
Despite a promise from the administration to help the middle-class, some may see their taxes go up under Obama’s new proposals, according to analysis by the Urban-Brookings Tax Policy Center.
The middle 20 percent of earners, or those making between $49,000 and $840,000, would actually see their taxes go up by an average of $7 in 2016, the nonpartisan group said.
“Both critics and supporters describe the Obama plan as a major redistribution of income through the tax code. In reality, it would significantly boost taxes on the rich and only modestly cut them for many low income households, though for some, especially those with young children, the boost in after-tax income would be substantial,” the center’s Howard Gleckman wrote.
“For most of the rest of us, the net impact would be relatively small though some people would enjoy hefty tax cuts and others would face big tax hikes,” he said.
The top 1 percent of earners — those who make more than $663,000 a year — would see their after-income tax fall by an average of 2 percent, or roughly $29,000. Those making even more — the 0.1 percent who make at least $3.4 million — will see an average of $168,000 cut from their income after taxes, the Tax Policy Center estimates.
However, those making between $84,000 and $142,000 will see their after-tax income go up by about $50.
Households making $25,000 or less will benefit the most from the plan — they can expect to see an average boost in their after-tax income of about 1.2 percent, or roughly $175, the center’s analysis found.
