Overall Distributional Effects

The TPC report, published May 1, estimates that among all families with children, about 62% would see a net tax reduction and 32% would face a higher tax bill. Families receiving a tax cut would see an average benefit of about $2,100, while those facing an increase would pay about $1,700 more on average. The findings were compiled by Principal Research Associate Margot Crandall-Hollick and Senior Fellow Elaine Maag.

Nearly three-quarters of families with children in the lowest 20% of the income distribution would see their after-tax income increase. The top income quintile is the only group for which the FFA would produce an average net loss, the TPC found, because higher-income families are less likely to benefit from the expanded CTC and more likely to be affected by the SALT cap. Among families with children in the lowest income quintile who would see their after-tax incomes fall, more than 9 in 10 are unmarried. Middle- and upper-income families with children would also see average tax bill increases from the elimination of the CDCTC.

To dig deeper, visit the original article on the Thomson Reuters blog.