Unlike the House Republican tax plan approved Thursday, the Senate version makes many of the tax breaks temporary. So what you pay the government in taxes each year could change over the next decade.
A new report by the nonpartisan Congressional Joint Committee on Taxation attempts to show how these shifting tax rates and provisions would affect different income groups.
Consumer Reports has taken the report and done some number crunching of our own to figure out what this could mean for you in dollars and cents.
First, keep in mind that the Senate plan is only a proposal at this stage. (It cleared the Finance Committee late Thursday and is now headed to the Senate floor.) The bill still needs to be reconciled with the House version, so a lot could change in the coming weeks.
Also know that the JCT report makes certain assumptions about the Senate bill, particularly involving the repeal of the individual health insurance mandate under the Affordable Care Act, which may not end up in the final bill.
That said, here's how the Senate plan could affect you.
In 2019, the year after the tax-cut plan takes effect, people in most income groups would be paying less in federal taxes. Here's what it would look like. Households making:
• Under $10,000 would save, on average, $5.
• $10,000 to $20,000 would save, on average, about $18.
• $20,000 to $30,000 would save, on average, $50.
• $30,000 to $40,000 would save, on average, $315.
• $40,000 to $50,000 would save, on average, $392.
• $50,000 to $75,000 (the biggest group of taxpayers) would save an average of $652.
• $1 million or more would save, on average, $15,473.
But just two years later, in 2021, the JCT report shows, taxpayers making $30,000 or less would pay more, as a group, than they do now. By 2023 those earning $40,000 or less would also pay more.
Again, in dollars and cents, here's what it would look like by 2025, the last year for most of the Senate's individual tax changes. Those making:
• $10,000 per year or less would owe an average of $15 more than they do now.
• $10,000 to $20,000 would pay an extra $186.
• $20,000 to $30,000 would pay an average of $190 more.
• $1 million or more would still benefit, saving an average of $14,394.
By 2027, all income categories would be paying more in taxes.
