OPINION:
For those interested in facts, which are quite stubborn but still matter, here is an indisputable truth based on simple arithmetic: The 2017 Tax Cuts and Jobs Act delivered the biggest rewards to lower- and middle-class Americans while increasing the total income tax burden borne by the ultra-wealthy.
Once again, based solely on objective statistical analysis of IRS data, it is indisputable that the Tax Cuts and Jobs Act most benefited hardworking Americans, particularly those earning less than six figures annually, while making the tax code more progressive.
For those interested in the specifics, a new Policy Study by The Heartland Institute provides an in-depth analysis detailing how much the Tax Cuts and Jobs Act reduced the average amount of personal income taxes paid by filers in every income bracket.
As mentioned previously, the headlines speak for themselves. However, this bears repeated emphasis because, to put it mildly, the American people have been misled for years about the effects of the so-called Trump tax cuts.
Since Republicans began crafting the legislation that became the Tax Cuts and Jobs Act, mainstream media have perpetuated the false narrative that the tax cuts were a boon to the wealthy funded on the backs of blue-collar Americans. Across the cable news networks, the tax law was derided as another giveaway to the wealthy.
Unexpectedly, Democrats ran with the same story. There are endless examples of prominent Democrats telling tall tales about how the Tax Cuts and Jobs Act shafted average Americans while enriching millionaires and billionaires.
Yet again, this is patently false.
Gaslighting the American people is not a good idea. It makes those who bend and twist the truth to further their ideological agenda lose credibility and public trust.
The left and their allies in the corporate media want you to believe that the Tax Cuts and Jobs Act is a terrible, horrible, no good, very bad thing because it violates their sacred code of more government, more taxes.
On a practical level, the American people saw through this as their paychecks got fatter because of the across-the-board nature of the rate cuts imposed by the Tax Cuts and Jobs Act. Even more important, because the rate cuts were designed to disproportionately benefit those in the lower and middle brackets regarding the overall reduced average effective income tax rate, the real-world results of the law undermined the entire talking point.
This is a critical point that bears further explanation. Although all income brackets indeed received rate cuts, the rate cuts were disproportionately tilted in favor of the lower- and middle-income brackets. Therefore, households in those income tax brackets received a far larger percentage of savings than those in the highest brackets.
As most Americans probably know, the Tax Cuts and Jobs Act is set to expire at the end of the year. That means big tax hikes are set to take place at the stroke of midnight on Dec. 31.
During the 2024 campaign, President Trump repeatedly promised to extend the Tax Cuts and Jobs Act’s rate reductions. Even better, he vowed to make them permanent.
Best of all, he proposed a few new tax savings directly targeted for middle- and lower-income earners. Although the reconciliation bill is not even close to completion, it seems like Trump’s ideas of no taxes on tips, no taxes on overtime and no taxes on Social Security are part of the package.
If those elements are included in version 2.0 of the Tax Cuts and Jobs Act, which would expressly reduce taxes for millions of hardworking Americans, the overall economic benefits for the lower and middle classes would become so obvious that even the media might change their tune.
• Chris Talgo (ctalgo@heartland.org) is editorial director at The Heartland Institute.
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