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Kurt#1
Senior Contributor

Republican tax reform benefitted working and low income

Congressional Democrats have argued that one of the best ways to pay for the legislation is to raise taxes on wealthy households, which, according to many on the left, have benefited disproportionately and unfairly from the 2017 tax reform law passed by Republicans and signed by former President Trump. The latest data, however, proves that this claim is pure mythology.

Income data published by the IRS clearly show that on average all income brackets benefited substantially from the Republicans’ tax reform law, with the biggest beneficiaries being working and middle-income filers, not the top 1 percent, as so many Democrats have argued.

A careful analysis of the IRS tax data, one that includes the effects of tax credits and other reforms to the tax code, shows that filers with an adjusted gross income (AGI) of $15,000 to $50,000 enjoyed an average tax cut of 16 percent to 26 percent in 2018, the first year Republicans’ Tax Cuts and Jobs Act went into effect and the most recent year for which data is available.

Filers who earned $50,000 to $100,000 received a tax break of about 15 percent to 17 percent, and those earning $100,000 to $500,000 in adjusted gross income saw their personal income taxes cut by around 11 percent to 13 percent.

By comparison, no income group with an AGI of at least $500,000 received an average tax cut exceeding 9 percent, and the average tax cut for brackets starting at $1 million was less than 6 percent. (For more detailed data, see my table published here.)

That means most middle-income and working-class earners enjoyed a tax cut that was at least double the size of tax cuts received by households earning $1 million or more.

What’s more, IRS data shows earners in higher income brackets contributed a bigger slice of the total income tax revenue pie following the passage of the tax reform law than they had in the previous year.

In fact, every income bracket with filers earning $200,000 or more increased its tax burden in 2018 compared to 2017, and every income bracket with a top limit lower than $200,000 paid a smaller proportion of the total personal tax revenue collected.

That means that Republicans’ tax reform law resulted in the tax code becoming slightly more progressive — the exact opposite of what Democrats have claimed over the past four years.

16 Replies
sdholloway56
Senior Advisor

Re: Republican tax reform benefitted working and low income

Who writes this stuff?

sdholloway56
Senior Advisor

Re: Republican tax reform benefitted working and low income

Who writes this stuff?

Growth sucked and it was the worst Admin for job growth sinceHoover.

rickgthf
Senior Advisor

Re: "See my table published here"? See whose table .....

... published where?

r3020
Senior Advisor

Re: "See my table published here"? See whose table .....

Dems are voting for a huge tax cut for the rich by reinstating the SALT deduction. The party of the rich by the rich and for the rich will take care of the rich at the expense of the American worker.

rickgthf
Senior Advisor

Re: This analysis only considered the effects on individual personal income tax, ...

... nothing about corporate tax.  If you look at Table 1,  they only consider individual income tax contributions which declined from $1.605 trillion to $1,538 trillion or some $66 billion between 2017 & 2018.  

  That  $66 billion is hardly significant when compared to the GOP advertised $2 trillion in corporate taxes, 66 vs 2000 billion.  This is a classic bait & switch article.  Sure all individuals paid $66 billion less in taxes but corporations & companies paid roughly $1,934 billion less.  Over 29 times less to be exact.

 The point they completely miss is that since it is the wealthy who own most of the stock, their wealth held in corporations increased astronomically compared to lower-income people

sam1wiseone
Senior Contributor

Re: This analysis only considered the effects on individual personal income tax, ...

Democrat inflation is the most regressive tax of all.

aljessen61
Senior Contributor

Re: This analysis only considered the effects on individual personal income tax, ...

You have the morons chirping Kurt. They just can't believe the other side has their best interest in mind.

rickgthf
Senior Advisor

Re: "Best interests in mind"?

  Even the author of the article admits it's "only very slightly more progressive", insignificantly more progressive, in fact.  Meanwhile, wealthy stockholders of big companies get the lion's share of $2 trillion richer.  When you consider the corporate side of the trump tax cuts it becomes enormously less progressive.

  As always, you need to follow the money.

  

rickgthf
Senior Advisor

Re: Tell me something, Al, ....

... were you born  this stupid, or did your mother drop you on your head.