Democrats Peddle Fake News to Repeal Trump Tax Cuts

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Posted by Regina Kelley on Monday, July 26th, 2021, 12:08 PM PERMALINK

President Joe Biden and congressional Democrats claim that the 2017 Trump Tax Cuts and Jobs Act (TCJA) was a giveaway to the rich. Not only do they want to reverse the tax cuts, but they are also proposing trillions of dollars in tax increases. In order to rewrite history and pave the way for tax hikes, Democrats have repeatedly lied about the GOP tax cuts by claiming that the wealthy saw significant tax cuts and the middle class saw little or no benefit. 

House Speaker Nancy Pelosi (D-Calif.) has described the TCJA as a “tax scam” that went to the wealthiest people in the country, while President Biden has claimed the vast majority of the bill went to the top one-tenth of one percent of wage earners.

In reality, the TCJA grew the pre-COVID economy and cut taxes for the middle class and small businesses. The TCJA expanded the child tax credit from $1,000 to $2,000, and doubled the standard deduction to $24,000 for married couples filing jointly, and $12,000 for single filers. Businesses across the country provided their workers with bonuses, wage raises, increased 401(k) matches and more employee benefit programs. 

Under the legislation, a family of four with a median income of $73,000 saw a $2,000 tax cut, a 60 percent reduction in federal income tax. Similarly, a single parent with one child making $41,000 saw a $1,300 tax cut.

In 2018, Americans with incomes between $50,000 and $100,000 saw their tax liability drop by twice as much as Americans with income above $1 million: 

  • Americans with adjusted gross income (AGI) of $50,000 to $74,999 saw a 13.2 percent reduction in average tax liabilities between 2017 and 2018. 
  • Americans with AGI of between $75,000 and $99,999 saw a 13.6 percent reduction in average federal tax liability between 2017 and 2018. 
  • Americans with AGI of $1 million or above saw a 5.8 percent reduction in average federal tax liability between 2017 and 2018, less than half the tax cut seen by Americans with AGI between $50,000 and $100,000. 

 

While the middle-class saw their liability drop, the top one percent ended up paying a higher percentage of all income taxes after the TCJA’s passage. In 2018, the top one percent paid 40 percent of all income taxes; before the TCJA was enacted, they paid 38 percent of all income taxes. 

The Trump tax cuts also grew the economy leading to a record low poverty rate, low unemployment, increased jobs and wages, and more economic opportunity. After the TCJA, the unemployment hit a record 50 -year low with the lowest ever recorded unemployment rate for Hispanics and African Americans. There were 1.4 million more jobs than people unemployed in 2019 and wages increased by 6.8 percent in one year, as opposed to just a 5 percent growth over Obama’s presidency. 

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.”

Despite Democrats’ rhetoric, Republicans delivered savings to the American middle-class when they passed the tax cuts. Ironically, President Biden and congressional Democrats’ plan would actually result in middle-class Americans paying more in taxes. 

 

Photo Credit: Bill Clark/Pool via AP

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