Manchin’s Call to Repeal Trump Tax Cuts Will Harm West Virginians

IRS data: West Virginians making between $25,000 and $75,000 got a 25% tax cut

Sen. Joe Manchin (D-W.V.) has said Democrats should repeal the Trump tax cuts.

But the Tax Cuts and Jobs Act provides significant tax relief for middle income West Virginia households, according to an analysis of official IRS Statistics of Income data performed by ATR. The analysis compares 2017 data with 2019 data, the most recent year available:

26% tax cut for West Virginians making between $25k – $50k. West Virginia households with adjusted gross income between $25,000 and $50,000 saw their average federal income tax liability drop from $2,190 in 2017 to $1,783 in 2019, a 26% reduction in federal income tax liability.

25% tax cut for West Virginians making between $50k – $75k. West Virginia households with adjusted gross income between $50,000 and $75,000 saw their average federal income tax liability drop from $5,348 in 2017 to $4,268 in 2019, a 25% reduction in federal income tax liability.

23% tax cut for West Virginians making between $75k – $100k. West Virginia households with adjusted gross income between $75,000 and $100,000 saw their average federal income tax liability drop from $8,720 in 2017 to $7,064 in 2019, a 23% reduction in federal income tax liability.

Just a 2.9% tax cut for West Virginians making over $1 million. Manchin and Democrats claim the tax cuts were for “the rich” but as shown by the data, middle income West Virginians saw a significantly greater tax cut than those earning over $1 million. West Virginia households earning over $1 million saw their federal income tax liability drop from $627,329 in 2017 to $609,768 in 2019, a reduction of just 2.9%. Data from the Congressional Budget Office also shows that high-earning Americans pay a greater share of taxes than before the Trump tax cuts. In other words, the tax code actually became more progressive, though you won’t hear Democrats admit it.

The TCJA also contained numerous reforms that benefited West Virginia households:

WV households no longer stuck paying the Obamacare mandate tax. The TCJA zeroed out the Obamacare individual mandate tax penalty effective 2019. In 2017, 22,960 West Virginia households paid the Obamacare individual mandate tax penalty. 20,940 (91%) households earned less than $75,000. 18,320 households paid the Obamacare individual mandate tax penalty in 2018. 16,180 households (88%) 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. 723,830 WV households took the standard deduction in 2018 including 712,380 households earning less than $200,000. 739,300 households took the standard deduction in 2019 including 722,600 households earning less than $200,000.

20% tax deduction for WV small businesses. The TCJA created a new, 20% deduction for small businesses organized as passthrough entities (LLCs, sole proprietors, S-corporations, partnerships). 71,030 WV taxpayers claimed the small business deduction in 2019 including 61,630 taxpayers earning less than $200,000. 62,510 taxpayers claimed the small business deduction in 2018 including 54,390 taxpayers earning less than $200,000.

Doubled Child Tax Credit. The TCJA doubled the child tax credit from $1,000 to $2,000. 187,660 WV households took the child tax credit in 2019 including 180,710 households earning less than $200,000. 186,230 households took the child tax credit in 2018 including 179,600 households earning less than $200,000.

Employers of all sizes also responded to the tax cuts by hiring, expanding, raising pay and increasing employee benefits. These gains will be threatened if Manchin succeeds in repealing the TCJA.