We have all heard endless rhetoric about this from politicians during the debate about Trump's new tax reform. Democrats claim it will hurt the middle class, the Republicans the opposite. However, none of them is willing to define what income level constitutes "middle class". So, I figure I'd give it a shot. Let's assume this would apply to a typical family of husband, wife and one child where both people work.

The breakdown (to me, anyway) is like this:

Working class: less than $75,000 annual income.
Lower middle class: $75,000 to $125,000
Middle class: $125,000 to $225,000
Upper middle class: $225,000 to $350,000
Wealthy: $350,000 and up

You might want to add $25,000 to each bracket when the family lives in a state with high state and local income tax rates. This amounts to right at $18 per hour at the highest working class level, slightly over $84 an hour at the lowest level for the wealthy (assuming 4160 working hours per year for both parents).

Working class folks pay more on average in payroll tax than they do Federal income tax each year, which is highly regressive. They do get a refundable child and/or earned income credit which eases the bite somewhat.

I can't see where this tax bill is going to have a lot of effect on any of these classes. Lower income taxpayers will save money because the maximum standard deduction will increase to $24,000. Upper income people may see lower tax rates and some widening of the brackets, but in high tax states they are going to lose out because of the cap on property taxes deductible.

Basically this whole thing is like rearranging the deck chairs on the Titanic-much ado about nothing!

It seems abundantly clear that the bulk of the goodies goes to those individuals whose rates were actually cut by a couple percent, to business owners, and to corporations. How the big break to corporations might increase the personal income of execs I'm not sure. The rationale for it, of course, was to create more and better jobs in the U.S. because it will now be more attractive for corporations to be based here. There has been quite a bit of speculation that the new structure may instead increase the flow of capital out of the country.

I was pretty excited by the prospect of simplification of the tax code. That hasn't been a result of this bill. Tax accountants aren't worried at all that their industry is in for downsizing.