On the fifth anniversary of the signing of the Tax Cuts and Jobs Act (TCJA) ATR notes the great relief delivered to the American people by this legislation.
President Biden and Vice President Harris have not rescinded their calls to “eliminate” the TCJA. Such elimination would impose an enormous tax increase on Americans.
The IRS 2020 Statistics of Income (SOI) data, the agency’s most recent available data, shows that most Americanhouseholds saw a significant tax cut between 2017 and 2020.
The SOI data shows that middle income American households saw the biggest tax cuts:
23.1% tax cut for Americans making between $25k – $50k. American households with adjusted gross income between $25,000 and $50,000 saw their average federal income tax liability drop from $2,272.89 in 2017 to $1,846.78 in 2020, a 23.1% reduction in federal income tax liability.
20.8% tax cut for Americans making between $50k – $75k. American households with adjusted gross income between $50,000 and $75,000 saw their average federal income tax liability drop from $5,503.53 in 2017 to $4,554.17 in 2020, a 20.8% reduction in federal income tax liability.
16.7% tax cut for Americans making between $75k – $100k. American households with adjusted gross income between $75,000 and $100,000 saw their average federal income tax liability drop from $8,973.93 in 2017 to $7,688.17 in 2020, a 16.7% reduction in federal income tax liability.
A 0.4% tax hike for Americans making over $1 million. Democrats claim the tax cuts were for “the rich” but as shown by the data, middle income Americanssaw a greater tax cut than those earning over $1 million. American households earning over $1 million saw their federal income tax liability increase from $934,957.94 in 2017 to $938,816.08 in 2020, a 0.4% increase.
Data from the Congressional Budget Office found that the TCJA made the tax code more progressive, not less. The CBO report found that the top one percent of earners paid a greater share of income taxes and federal taxes after the TCJA was signed into law:
- The top one percent of earners paid 38.6 percent of income taxes in 2017 and 41.7 percent of income taxes in 2018.
- The top one percent of earners paid 25.5 percent of all federal taxes in 2017 and 25.9 percent of income taxes in 2018.
So high-earning Americans pay a greater share of taxes than before the TCJA, but you’ll never hear Democrats admit it.
Main Street businesses were able to expand, raise employee pay and purchase new equipment. Americans for Tax Reform has compiled over 1,200 such examples nationwide.
The TCJA also contained numerous reforms that benefited American households:
Millions of American households are no longer stuck paying the Obamacare mandate tax. The TCJA zeroed out the Obamacare individual mandate tax penalty effective 2019. In 2017, 4,654,990 American households paid the Obamacare individual mandate tax penalty. 4,153,930 (89.23%) households earned less than $75,000. 3,797,480 households paid the Obamacare individual mandate tax penalty in 2018. 3,294,660 households (86.76%) earned less than $75,000.
Doubled Standard Deduction. The TCJA doubled the standard deduction from $12,000 to $24,000 for taxpayers filing jointly and $6,000 to $12,000 for single filers. 138,079,620 American households took the standard deduction in 2019 including 137,893,480 households earning less than $200,000. 142,979,390 taxpayers took the standard deduction in 2020 including 133,662,720 taxpayers earning less than $200,000.
20% tax deduction for American small businesses. The TCJA created a new, 20% deduction for small businesses organized as passthrough entities (LLCs, sole proprietors, S-corporations, partnerships). 22,735,830 American taxpayers claimed the small business deduction in 2020 including 18,237,470 taxpayers earning less than $200,000. 22,136,740 taxpayers claimed the small business deduction in 2019 including 17,716,620 taxpayers earning less than $200,000.
Doubled Child Tax Credit. The TCJA doubled the child tax credit from $1,000 to $2,000. 39,080,040 American households took the child tax credit in 2020 including 35,735,720 households earning less than $200,000. 39,533,020 households took the child tax credit in 2019 including 36,273,990 households earning less than $200,000.
For years, President Joe Biden has falsely claimed that the 2017 Tax Cuts and Jobs Act (TCJA) passed by the Congressional Republicans and President Trump overwhelmingly benefited “the rich” and large corporations and did little or nothing to help middle class families.
Even left-leaning media outlets have (eventually) acknowledged the tax cuts benefited middle class families. The Washington Post fact-checker gave Biden’s claim that the middle class did not see a tax cut its rating of four Pinocchios. The New York Times characterized the false perception that the middle class saw no benefit from the tax cuts as a “sustained and misleading effort by liberal opponents.”
CNN’s Jake Tapper also called out Biden for lying about the tax cuts. Tapper said: “In reality it is likely that many of the people in Biden’s audience that day at the Teamsters banquet hall in Pittsburgh benefited from that tax cut. But no matter what you think, the facts are, most Americans got a tax cut.”
Other outlets have repeatedly called out the Biden lie:
The Washington Post stated: “Most Americans received a tax cut.”
The New York Times stated: “Most people got a tax cut.”
FactCheck.org stated: “Most people got some kind of tax cut.”
H&R Block stated: “The vast majority of people did get a tax cut.”
Despite the Left’s rhetoric, the TCJA directly reduced taxes for American middle-class families and grew the economy, increasing wages and creating more job opportunities for Americans.