IRS Data: Middle Income Taxpayers Saw Significant Tax Cuts in Key Swing States

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Posted by Alex Hendrie on Monday, October 5th, 2020, 2:00 PM PERMALINK

Middle class American families in key Presidential and Senate swing states saw significant tax reduction from the Trump-Republican Tax Cuts and Jobs Act (TCJA). While the TCJA reduced taxes for American families at every income level, middle income families saw the biggest tax reduction, according to IRS data compiled by ATR. This middle-class tax cut contradicts the claims made by the left that this law overwhelmingly cut taxes for “the rich.” 

This data compared “total tax liability” between 2017 and 2018 in Ohio, Pennsylvania, Texas, Arizona, Nevada, Florida, Georgia, Maine, Michigan, North Carolina, Wisconsin, Colorado, Montana, and Iowa. Total tax liability includes federal income taxes as well as taxes listed on IRS form 1040 such as social security taxes on self-employment income and tax applicable to individual retirement arrangements (IRAs).

Nationwide, American families with incomes between $50,000 and $100,000 saw their tax liability drop by twice as much as Americans with income above $1 million. The trend of middle-income Americans seeing greater tax cuts than millionaires is also seen in states across the country.

For instance, in Ohio, American families with AGI of between $25,000 and $49,999 saw an average reduction in tax liability of 14.4 percent. Families with AGI between $75,000 and $99,999 saw an average reduction in tax liability of 15.3 percent. 

In contrast, Americans with AGI of $1 million or above saw an average reduction in tax liability of 0.4 percent.

Similarly, in Pennsylvania, households in the AGI brackets of $25,000 and $49,999, with AGI of between $50,000 and $74,999 and with AGI of $75,000 and $99,999 all saw average tax cuts of 14 percent or more. By comparison, Americans with AGI of $1 million or above saw tax cuts averaging 3.1 percent.

Texas and Florida are outliers in that taxpayers earning $1 million or above saw similar tax reduction to middle income taxpayers. A possible reason for this is that Texas and Florida are both “no income tax states,” so taxpayers would have been unaffected by the TCJA limitation on deducting state and local taxes (SALT).

The full data on each state is below.

Ohio

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,789.59 in 2017 to $2,389.05 in 2018, a 14.4 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,865.81 in 2017 to $5,013.63 in 2018, a 14.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $9,168.66 in 2017 to $7,761.84 in 2018, a 15.3 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $17,614.13 in 2017 to $15,401.30 in 2018, a 12.6 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $760,382.14 in 2017 to $757,492.05 in 2018, a 0.4 percent reduction in federal tax liability.

 

Pennslyvania

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,802.11 in 2017 to $2,410.56 in 2018, a 14 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,915.73 in 2017 to $5,075.37 in 2018, a 14.2 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $9,519.73 in 2017 to $7,822.61 in 2018, a 14.6 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $18,037.37 in 2017 to $15,888.72 in 2018, a 11.9 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $848,564.65 in 2017 to $821,984.86 in 2018, a 3.1 percent reduction in federal tax liability.

 

Texas

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,661.04 in 2017 to $2,376.69 in 2018, a 10.7 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,584.79 in 2017 to $4,845.27 in 2018, a 13.2 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $9,033.36 in 2017 to $7,707.05 in 2018, a 14.7 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $18,590.69 in 2017 to $16,177.64 in 2018, a 13.0 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $1,001,319.32 in 2017 to $864,387.92 in 2018, a 13.7 percent reduction in federal tax liability.

 

Arizona

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,615.08 in 2017 to $2,313.67 in 2018, an 11.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,566.23 in 2017 to $4,841.36 in 2018, a 13.0 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,920.40 in 2017 to $7,658.675 in 2018, a 14.1 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $17,957.82 in 2017 to $15,727.25in 2018, a 12.4 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $823,514.63 in 2017 to $753,368.45 in 2018, a 8.5 percent reduction in federal tax liability.

 

Nevada

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,617.7 in 2017 to $2,337.07 in 2018, a 10.7 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,656.8 in 2017 to $4,920.07 in 2018, a 13.0 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $ 9,133.8 in 2017 to $ 7,827.59 in 2018, a 14.3 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $18,272.7 in 2017 to $15,922.23 in 2018, a 12.9 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability increase from $1,140,405.0 in 2017 to $1,143,723.22 in 2018, a 0.3 percent increase in federal tax liability.

 

Florida

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,613.12 in 2017 to $2,321.82 in 2018, a 11.1 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,675.12 in 2017 to $4,901.67 in 2018, a 13.6 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $9,168.57 in 2017 to $7,859.65 in 2018, a 14.3 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $18,528.07 in 2017 to $16,122.07 in 2018, a 13.0 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $1,165,563.77 in 2017 to $1,010,261.10 in 2018, a 13.3 percent reduction in federal tax liability.

 

Georgia

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,553.19 in 2017 to $2,312.76 in 2018, a 9.4 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,459.71 in 2017 to $4,829.49 in 2018, a 11.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,803.29 in 2017 to $7,675.99 in 2018, a 12.8 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $17,824.57 in 2017 to $15,881.30 in 2018, a 10.9 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $786,363.64 in 2017 to $737,697.06 in 2018, a 6.2 percent reduction in federal tax liability.

 

Maine

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,856.90 in 2017 to $2,466.15 in 2018, a 13.7 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,725.49 in 2017 to $4,951.34 in 2018, a 13.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,824.15 in 2017 to $7,485.94 in 2018, a 15.2 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $17,314.79 in 2017 to $15,317.31 in 2018, a 11.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $626,594.90 in 2017 to $580,869.44 in 2018, a 7.3 percent reduction in federal tax liability.

 

Michigan

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,690.90 in 2017 to $2,341.82 in 2018, a 13.0 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,733.69 in 2017 to $4,939.96 in 2018, a 13.8 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,960.20 in 2017 to $7,604.86 in 2018, a 15.1 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $17,790.46 in 2017 to $15,523.34 in 2018, a 12.7 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $861,239.70 in 2017 to $842,104.99 in 2018, a 2.2 percent reduction in federal tax liability.

 

North Carolina

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,633.94 in 2017 to $2,327.11 in 2018, a 11.6 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,537.27 in 2017 to $4,800.64 in 2018, a 13.3 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,752.56 in 2017 to $7,479.65 in 2018, a 14.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $17,665.40 in 2017 to $15,580.95 in 2018, a 11.8 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $749,444.13 in 2017 to $738,040.64 in 2018, a 1.5 percent reduction in federal tax liability.

 

Wisconsin

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,814.83 in 2017 to $2,425.99 in 2018, a 13.8 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,723.83 in 2017 to $4,970.99 in 2018, a 13.2 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,562.71 in 2017 to $7,283.48 in 2018, a 14.9 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $16,769.65 in 2017 to $14,829.76 in 2018, a 11.6 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $819,695.33 in 2017 to $800,014.55 in 2018, a 2.4 percent reduction in federal tax liability.

 

Colorado

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,919.45 in 2017 to $2,555.25 in 2018, a 12.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,997.71 in 2017 to $5,220.98 in 2018, a 13.0 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $9,342.18 in 2017 to $8,072.75 in 2018, a 13.6 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $18,528.19 in 2017 to $16,214.74 in 2018, a 12.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $799,532.72 in 2017 to $763,601.61 in 2018, a 4.5 percent reduction in federal tax liability.

 

Montana

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,777.24 in 2017 to $2,417.81 in 2018, a 12.9 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,563.07 in 2017 to $4,844.34 in 2018, a 12.9 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,612.29 in 2017 to $7,287.73 in 2018, a 15.4 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $16,879.90 in 2017 to $14,679.53 in 2018, a 13.0 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $731,934.88 in 2017 to $708,856.00 in 2018, a 3.2 percent reduction in federal tax liability.

 

Iowa

  • Taxpayers with AGI of between $25,000 and $49,999 saw their average tax liability drop from $2,777.97 in 2017 to $2,390.11 in 2018, a 14 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $50,000 and $74,999 saw their average tax liability drop from $5,573.02 in 2017 to $4,774.71 in 2018, a 14.3 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $75,000 and $99,999 saw their average tax liability drop from $8,431.20 in 2017 to $7,011.00 in 2018, a 16.8 percent reduction in federal tax liability.
  • Taxpayers with AGI of between $100,000 and $200,000 saw their average tax liability drop from $16,776.49 in 2017 to $14,519.44 in 2018, a 13.5 percent reduction in federal tax liability.
  • Taxpayers with AGI of over $1 million saw their average tax liability drop from $763,403.78 in 2017 to $719,900.77 in 2018, a 5.7 percent reduction in federal tax liability.

 

Photo Credit: Pictures of Money

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