Low-income Americans would lose, while rich Americans would receive massive benefits, nonpartisan report says.
"The Tax Cut Bill is coming along very well, great support," President Donald Trump wrote in a tweet. "With just a few changes, some mathematical, the middle class and job producers can get even more in actual dollars and savings and the pass through provision becomes simpler and really works well!.”
But Trump’s claims were in contrast to a report Sunday by the nonpartisan Congressional Budget Office (CBO) that said the proposed legislation would make lower income Americans poorer, while it would give massive tax cuts and benefits to the rich.
The bill would negatively affect those who earn less than $30,000 per year by 2019, while those who make more than $100,000 would be the main beneficiaries.
Most personal itemized deductions and a number of credits are eliminated. And a deduction retained explicitly for charitable gifts -- a move use by the wealthy to lower their tax liabilities.
Another benefit for the rich would be a 20 percent tax cut.
The analysis comes as the Senate pushes its version of tax reform, which reportedly could see a vote as early as Thursday. A version of tax reform in House of Representatives was approved last week. For legislation to become law, versions in the House and Senate would need to married into a single bill and passed by both chambers.
Democrats and others, however, have criticized the Senate bill and the Trump administration for a provision that would lower the corporate tax rate they say would hurt the government's income and increase the federal deficit.
The bill is projected to add $1.4 trillion to the federal debt over the next 10 years.
The corporate tax rate would be lowered to 20 percent, from the existing 35 percent, to boost the earnings of companies.
The analysis also added that Americans who annually make $40,000 or less would be net losers by 2021 and most earning less than $75,000 a year would be worse off by 2027, due to receiving less governmental aid for health care.
The CBO said the new legislation that eliminates the obligation that all Americans get health insurance would increase insurance rates, leading 4 million Americans to lose health insurance by 2019. That figure would spike to 13 million by 2027.