Under the TCJA, the average first-year tax cut for a low-income household (making $25,000 or less) was $60, or 0.4 percent of their after-tax income. The average tax cut for the highest-income 0.1 percent of households (making $3.4 million or more) was $193,000, or 2.7 percent of after-tax income.
By contrast, in the Senate bill a household making $25,000 or less would receive an average tax cut of $2,800 this year, boosting their after-tax income by 20 percent. But average taxes would not change at all for a household making $3.5 million. A low-income household with children would get an average tax cut of nearly $7,700, raising their after-tax income by more than 35 percent.
The difference for middle-income households also is striking. The TCJA cut their 2018 taxes by an average of about $930, or 1.6 percent of their after-tax income. The Senate version of the ARP would cut their taxes this year by an average of $3,350 or 5.5 percent of their after-tax income