Nearly 40 percent of the Trump administration’s proposed income-tax cuts would go to the richest 1 percent of Mainers, and the poorest 20 percent of state residents would receive less than 2 percent of the cuts, according to an analysis issued Wednesday by a liberal think tank based in Washington, D.C.

The Institute on Taxation and Economic Policy said Maine households projected to have income of at least $473,000 in 2018 would receive 38.8 percent of the proposed tax cuts based on a broad “framework” document issued by the White House last week. Those households, the wealthiest 1 percent in the state, would see their federal income tax burden decrease by an average of $30,390 in 2018, increasing their income by an average of 2.5 percent, the institute said.

The proposed changes would particularly benefit those households with incomes greater than $1 million, it said. Those households, which make up 0.3 percent of Maine’s population, would receive 30.7 percent of the tax cuts if the plan went into in effect in 2018. Those households would receive an average tax cut of $72,500 in 2018, which would increase their income by an average of 3.1 percent, it said.

On the other end of the spectrum, the poorest 20 percent of Maine households would receive about 1.6 percent of the tax cuts, the institute said. Those households, which are projected to earn an average of less than $22,500 in 2018, would receive an average tax break of $70 under the proposed tax reform, increasing their income by an average of 0.5 percent.

The middle 20 percent of households in Maine, which represent the state’s middle class, would receive 9.9 percent of the tax cuts that go to Maine under the framework, according to the institute. In 2018, those households are projected to earn an average income of $48,500. The proposed tax reform would cut their taxes in 2018 by an average of $390, which would increase their income by an average of 0.8 percent, it said.

The institute said it calculated the figures based only partly on the framework document, which is relatively vague in how it proposes to deliver $2.2 trillion in tax cuts. It said the analysis required several assumptions based on more detailed proposals that were either released during President Trump’s presidential campaign or included in tax overhaul proposals from Republican leaders in Congress.

The nine-page tax reform framework, released Sept. 27, is missing critical details such as where the individual tax brackets would begin and end, whether certain deductions for businesses would go away, and what would happen to capital gains taxes. Without that information, some tax analysts have said it is impossible to know which groups would benefit or be hurt by the proposed changes.

But that hasn’t stopped many partisan groups from releasing their own analyses of how the proposed tax code changes would affect individual taxpayers, businesses and the U.S. economy.

Jacob Posik, a policy analyst at the conservative Maine Heritage Policy Center in Portland, said all of those analyses should be viewed with skepticism.

“As of right now, the plan itself is just a compilation of ideas – it is not yet a bill. We do not know what the taxable income thresholds will be under this plan, what the child tax credit will be increased to, how head of household status would change, and a number of other pertinent unknowns that will affect low- and middle-income earners,” Posik said. “Any analysis out there today should be considered highly suspect and political in nature given these unknowns.”

J. Craig Anderson can be contacted at 791-6390 or at:

[email protected]

Twitter: @jcraiganderson

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