President Donald Trump continues to say his new tax plan would help middle-class families, but what does that mean exactly?
Here are three questions -- and answers -- on the plan:
3. What is the middle class?
The federal government doesn't define "middle class." But, we do know that California's median household income last year was $66,637, according to Federal Reserve Bank of St. Louis analysis of U.S. Census Bureau data.
2. So would the so-called "middle class" benefit from this plan?
On the surface, yes. The plan would double the deduction for married and single people who file taxes, meaning less of their income would be subject to federal income tax. But, other deductions could also be affected by Trump's plan.
"It kind of depends on what they do with the rules of the game," said Chris Hoene, Executive Director of the nonpartisan California Budget & Policy Center. "If they are actually doubling the standard deduction and that's what gets passed, there will undoubtedly be some households that will gain in terms of a lower overall tax bill."
1. What else should I know about the plan?
There would be a tax cut for corporations, from 35 percent to 20 percent. However, there's little evidence that a tax cut for corporations actually helps the economy.
"There's not much research showing that there's an overall, positive, kind of trickle down effect of tax cuts that go just to corporations and wealthy households," said Hoene.
Moreover, the plan might add to our national debt.
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