Four years after President Donald Trump and congressional Republicans passed the Tax Cuts and Jobs Act (TCJA) into law, IRS data prove the historic legislation benefited those in the working- and middle-classes more than the wealthy.
For instance, in September 2017, Sen. Chuck Schumer (D-N.Y.) claimed Trump’s TCJA was “wealthfare” for the rich.
Schumer added: “Each of these proposals would result in a massive windfall for the wealthiest Americans and provide almost no relief to middle-class taxpayers who need it most. It seems that President Trump and Republicans have designed their plan to be cheered in the country clubs and the corporate boardrooms.”
Not to be outdone, Rep. Nancy Pelosi (D-Calf.) declared the TCJA is “a framework that gives away the store to the wealthiest while sticking the middle class with the bill.”
Sen. Bernie Sanders (I-Vt.) chimed in with his two cents on the TCJA as well, labeling the bill “morally repugnant and bad economic policy.”
What a difference four years and unequivocal data make.
Specifically, as Haskins notes, “the Tax Cuts and Jobs Act reduced average effective income tax rates for filers in every one of the IRS’s income brackets, with the largest benefits going to lower- and middle-income households.”
Moreover, “IRS data further show that the Tax Cuts and Jobs Act appeared to have a strong upward effect on economic mobility. The number of filers with an adjusted gross income of $1 to $25,000 decreased by more than 2 million in just one year, while the number of households reporting incomes higher than $25,000 increased in every income bracket.”
This shouldn’t be all that surprising to anyone who understands basic economics.
When tax rates are lowered across the board, as they were under TCJA, those at the bottom rungs of the economic ladder tend to benefit the most. As John F. Kennedy once said, “a rising tide lifts all boats.”
However, the fact that the middle- and lower-classes reaped the largest rewards from TCJA is only half of the story.
Despite Democrats’ allegations that the TCJA would be a windfall for the wealthy, the exact opposite occurred.
“The IRS data also revealed that higher-income earners paid an even larger share of the total tax burden in 2018 than they did in 2017, indicating that the Tax Cuts and Jobs Act may have made the tax code slightly more progressive,” Haskins writes.
The proof is in the proverbial pudding: “In 2017, filers earning $500,000 or more paid 38.9 percent of all personal income tax revenues. In 2018, the same income bracket paid 41.5 percent of total income tax revenues.”
Unfortunately, the vast majority of Democrats and the mainstream media are less than likely to celebrate this good news. For one reason or another, the left has been, and remains, adamantly opposed to cutting taxes, even when the benefits of doing so overwhelmingly benefit the working- and middle-classes.
For as long as I can remember, the left has taken a monolithic position opposing across-the-board tax cuts, like those enacted under TCJA.
Americans ought to be well aware that the Republican’s TCJA was integral to the booming economy created before the pandemic, in which all Americans, but especially those in the lower- and middle-classes, experienced the greatest gains.
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