If implemented, John Boehner's latest fiscal cliff offer would most benefit the rich, according to a new analysis by the Tax Policy Center.
Under Boehner's so-called "Plan B," the average family in the top 0.1 percent of cash incomes would get a tax cut of $212,506, while the median-income family would take home a tax cut of just $2,012, in comparison to tax changes scheduled for Jan. 1, the Tax Policy Center found. The average family in the bottom fifth of the income distribution would benefit the least with a tax cut of only $66.
Boehner has most recently proposed extending the Bush tax cuts on incomes up to $1 million. But that means millionaires would still get a tax cut on their first $1 million of income, so they would receive the most money under Boehner's plan.
Boehner's proposal would be a boon for the rich in terms of tax rates, too. Households making $500,000 to $1 million per year would get the biggest federal tax rate cut, while families making the least money would get the smallest tax rate cut. In addition, all income groups making less than $100,000 per year would get a smaller tax rate cut on average than families making more than $1 million per year.
The study's findings may prove controversial, if history is any indication. The Tax Policy Center, a nonpartisan, nonprofit think tank, caused a stir when it concluded in August that Mitt Romney's tax plan was mathematically impossible.
There's little likelihood Plan B will become law, however. Though House Republicans cautiously support Boehner's new "Plan B", some Senate Democrats have said it is unacceptable, and the White House has said that Obama would veto Boehner's "Plan B" if it reached his desk.
A tax hike for the rich is a major point of contention in negotiations between Boehner and President Barack Obama over the fiscal cliff, a set of tax hikes and spending cuts scheduled to take place on Jan. 1. They seemed close to a deal only days ago, but they have not had formal talks since Monday, when Obama proposed cutting Social Security benefits and extending the Bush tax cuts on incomes below $400,000 per year.