Foreign investors will enjoy a greater benefit from the Republicans' tax plan than middle-class Americans, according to a new report.
In an opinion piece for The Hill, Matthew Gardner of the Institute on Taxation and Economic Policy explained that his organization has calculated that foreign investors will see a $48 billion tax cut in 2019.
This compares to $16 billion for the poorest 40 percent of Americans; the middle 20 percent will see a $25 billion tax cut.
"How can the president's tax plan be more generous to foreigners than to the entire middle class population of the United States?" Gardner asked in his piece for The Hill. "The answer lies in Trump's choice to make corporate tax cuts the focal point of his plan. The final bill cuts the corporate tax rate from 35 percent to 21 percent and introduces a variety of new tax avoidance opportunities for big multinational companies."
He went on to note that foreign investors own approximately 35 percent of corporate stock in the U.S.
"This 'America last' tendency in the Trump tax plan will become more pronounced over time," Gardner added. "Because the individual tax cuts in the plan are set to expire after 2025 and the corporate rate cuts are permanent."
Gardner acknowledged that the reductions for owners of pass-through businesses will bring some benefits to middle-income earners. However, he added that the bottom three-fifths of income earners will see a net tax increase by 2027.
"If you're wondering why Congress is creating this confusing mess, there's a straightforward explanation: our elected officials appear far more interested in giving tax cuts to the owners of businesses than in directly affecting the lives of middle-income families," wrote Gardner. "And our leaders' blind faith in the stimulative effect of corporate tax cuts appears insensitive to the question of whether these corporations or their owners are residents of the United States or the United Arab Emirates."
Republicans maintain that their tax plan will benefit working people.
House Speaker Paul Ryan noted on his website that high tax rates "discourage investment and job creation, discourage business activity, and put American businesses at a competitive disadvantage," according to CNBC.
Steve Cortes, a former Trump campaign operative, agreed that workers will benefit in a comment published by Fox News.
"AT&T and Comcast immediately promised $1,000 cash bonuses to over 300,000 workers combined," he wrote of the response to the tax bill's passage. "Boeing, which has seen its stock more than double since President Trump's election, promised $300 million in employee-related investments."
Sources: The Hill, CNBC, Fox News / Featured Image: Joyce Boghosian/whitehouse.gov via Wikimedia Commons / Embedded Images: U.S. Congress/speaker.gov via Wikimedia Commons, HanSangYoon/Wikimedia Commons