It’s Official: Trump's 2017 Tax Cuts Helped Low & Middle-Income Earners the Most, Not 'the Wealthy'

By IPI President Tom Giovanetti
 
It’s long past time to put to bed the canard that Republicans cut taxes to help their fat cat friends on Wall Street, while Democrats are looking out for the working man. Yet Democrats are desperately trying to cobble together a "Build Back Better” bill that would allow the wealthy to deduct more of their State & Local Taxes from their Federal Income Tax according to recent Internal Revenue Service (IRS) data.

And it’s clear that the biggest beneficiaries of the 2017 tax cut were middle-income filers, not upper-income households.

The new IRS data show that in 2018:
 
  • Filers with an adjusted gross income (AGI) between $15,000 and $50,000 had a tax cut of 16 percent to 26 percent;
  • Filers with an AGI between $50,000 and $100,000 had a tax cut of 15 percent to 17 percent;
  • Filers with an AGI between $100,000 and $500,000 had a tax cut of 11 percent to 13 percent;
  • Filers with an AGI above $500,000 averaged a 9 percent tax cut; and
  • Filers with an AGI above $1,000,000 received less than a 6 percent tax cut.
Now, certainly, 6 percent of $1 million is a larger amount in dollars than 26 percent of $20,000, but in terms of improvement in lifestyle and financial security, it’s also clear that the 2017 tax cut achieved its goal of boosting economic growth while also helping working Americans. So much for most of the rhetoric we hear about how the 2017 tax cuts were a handout to the wealthy.

Speaking of the wealthy, Democrats are looking under every rock and behind every bush to try to find pay-fors for their huge social-spending “Build Back Better” bill. But the one thing they won’t give up is their massive tax cut for the wealthy by restoring federal tax deductibility for state and local taxes (SALT).

We’ve written about this many times, but today we’ll let . . . Bernie Sanders (gulp) speak for us. Speaking of the Democrats’ current proposal to restore the SALT deduction, Sanders said:

 "At a time of massive income and wealth inequality, the last thing we should be doing is giving more tax breaks to the very rich. Democrats campaigned and won on an agenda that demands that the very wealthy finally pay their fair share, not one that gives them more tax breaks.”

Of course, we don’t agree with Bernie’s class warfare rhetoric, nor with his desire to raise taxes on, well, anyone. But he’s right—while Republicans in 2017 gave low- and middle-income earners a big tax cut, Democrats are now planning to do the same for the wealthy.

It’s been quite a flip.

Today's TaxByte was written by IPI President Tom Giovanetti.
 
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