20 December, 2021

Remember This the Next Time Democrats Claim Something About Republican ”Tax Cuts for the Rich”

Publications - Measuring the Effects of the Republicans’ Tax Cuts and Jobs Act on Personal Income Taxes | Heartland Institute

According to data from the U.S. Internal Revenue Service comparing outcomes from 2017 to 2018—the first year the tax reform law went into effect—the Tax Cuts and Jobs Act reduced average effective income tax rates for filers in every one of the IRS’s income brackets, with the largest benefits going to lower- and middle-income households. (See Table 1 by clicking "Download the PDF" at the top of this page.)

For example, after accounting for all tax deductions and credits, filers with an adjusted gross income (AGI) of $40,000 to $50,000 received an average tax cut of 18.2 percent.[4]

The IRS data further show that the Tax Cuts and Jobs Act appeared to have a strong upward effect on economic mobility. The number of filers with an adjusted gross income of $1 to $25,000 decreased by more than 2 million in just one year, while the number of households reporting incomes higher than $25,000 increased in every income bracket.[5]

The most significant increase occurred in the $100,000 to $200,000 bracket, which included more than 1 million additional filers in 2018 than it did in 2017.

Huh. Imagine that. Of course, that was predicted by anyone who actually studied the bill.

The available evidence is clear: Based on tax data from 2017 and 2018, the Tax Cuts and Jobs Act reduced taxes for the vast majority of filers, led to substantial improvements in upward economic mobility, and disproportionately benefited working- and middle-class households, many of which experienced tax cuts topping 18 percent to 20 percent.

Yes, I noticed it right away on my own tax return, as did my wife. “Why are our taxes so much lower this year?” she asked. “Because of the Trump tax cuts”, I responded.

She voted for him in 2020 after not having voted for him in 2016.

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