Federal tax law delivers greatest share of tax cut to the richest

Prosperity Watch, Issue 87, No. 3

June 19, 2018

June marks the six-month anniversary since the federal tax plan took effect, and analysis shows that it is benefiting the richest few the most while jeopardizing funding for healthcare, education and other investments that help working families.

In North Carolina, the richest top 5 percent of North Carolinians will receive over half (53 percent) of the tax cuts under the President’s tax plan. Moreover, by 2027, the share of the tax cuts to the richest 5 percent will increase to 60 percent.

In comparison, the bottom 60 percent (people currently making less than $60,000 a year) will only receive 13 percent of the tax cut next year – and this percentage will decrease to 11 percent by 2027.

Evidence shows that this federal tax law will further income inequality and do little to address the barriers to economic mobility for many people across North Carolina and the country. In turn, higher levels of income inequality have been connected to slower growth trajectories.