Study Says Tax Bill Hurts Poor, Helps Rich

A tax bill written by House Republicans and recent, along with proposed welfare changes, would cut the incomes of the poorest 20 percent of families by an average of $420, a liberal advocacy group said Monday.

The Center on Budget and Policy Priorities said 87 percent of the benefits of the tax and welfare changes would flow to the 20 percent with the highest incomes.

“The bottom 60 percent of the population - numbering more than 160 million people - would share 4 percent of the net benefits,” according to the study.

The conclusion is contrary to statements by the chief author of the bill, Rep. Bill Archer, R-Texas, who chairs the House Ways and Means Committee. He says 71 percent of the benefits would go to people who earn between $20,000 and $75,000 a year.

The analyses were released as the House and Senate prepared to vote this week on the tax bills and accompanying changes in the welfare system.

The analysis by the Center on Budget and Policy Priorities seeks to provide a greater picture of the tax and welfare bills’ effect on taxpayers. It measures the effects of tax changes on different groups, and considers the effects of welfare changes proposed both this year and last year.

The study finds the combined effects would reduce after-tax income of the poorest 20 percent of families by an average of $420. The most affluent 20 percent would see after-tax income rise by $2,500, it added.