IRS data shows Trump tax cuts were most beneficial to middle, working-class Americans

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A new analysis of a tax reform measure passed by the Republican-controlled Congress in December 2017 and signed by then-President Donald Trump reveals that working- and middle-class Americans benefitted greatly from the bill, not just the wealthiest earners as Democrats have frequently claimed.

The revelation comes as President Joe Biden and Democratic lawmakers are attempting to push through another massive $2.4 trillion bill dubbed “Build Back Better” that would likely reverse many of those gains and dramatically beef up the Internal Revenue Service in order to find the money to pay for the new spending. And for certain, the legislation targets wealthy earners.

But, according to an analysis of IRS data, all income brackets substantially benefitted from the GOP-Trump tax reforms, which were passed in December 2017 after Trump promised tax cuts during his campaign, “with the biggest beneficiaries being working and middle-income filers, not the top 1 percent, as so many Democrats have argued,” Justin Haskins, director of the Socialism Research Center at The Heartland Institute, noted in a column for The Hill.

The analysis noted that filers who claimed an adjusted gross income (AGI) of between $15,000 and $50,000 in 2018 — the latest year for which IRS data is available — received an average tax cut of 16-26 percent. That is also the same year the Tax Cuts and Jobs Act took effect, Haskins pointed out.

Meanwhile, Americans who earned between $50,000 and $100,000 got a tax break of around 15 to 17 percent, while earners in the $100,000-$500,000 range saw taxes reduced by 11 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,” Haskins wrote, pointing out that higher earners got less of a break than those in lower AGI brackets.

“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,” he added.

Haskins said the IRS data also shows that every bracket featuring filers earning $200,000 or more increased their tax burden in 2018 compared to 2017; by comparison, every bracket below $200,000 paid a smaller portion of the overall tax revenue the agency 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,” he wrote.

“The fact is, Republicans’ 2017 tax reform law did exactly what was promised: It lowered taxes for all income groups, provided the greatest benefits for middle-income households, and spurred economic growth that helped reduce poverty and improve prosperity,” he added.

Democrats, however, have continually claimed that the “Trump tax cuts” were mostly “for the wealthy.”

“Despite Republicans’ empty promises to cut taxes for middle-class working families, it’s clear that the GOP tax plan for the wealthiest is rich indeed,” then-House Minority Leader Nancy Pelosi (D-Calif.) said in November 2017, about a month before Congress passed the cuts.

“House Republicans’ tax bill would increase taxes for 12 percent of Americans next year, according to a new report from the nonpartisan Tax Policy Center,” she added.

“The truth is already catching up with the GOP’s snake oil pitch,” Pelosi claimed. “Instead of pushing a deficit-exploding handout to corporations and the wealthy that increases taxes on millions of hard-working families, Republicans must join Democrats to work on bipartisan tax reform that puts the middle class first.”

Jon Dougherty


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