Latest income data published by the IRS proves all income brackets benefited substantially from the Republican tax reform law, especially working and middle-income filers.
QUICK FACTS:
- A Heartland Institute analysis of IRS tax data shows that filers with an adjusted gross income (AGI) of $15,000 to $50,000 received an average tax cut of 16–26% in 2018, the first year Republicans’ Tax Cuts and Jobs Act went into effect and the most recent year for which data is available, according to The Hill.
- Earners of $50,000 to $100,000 received a tax break of about 15–17%.
- Filers earning $100,000 to $500,000 saw their personal income taxes cut by around 11–13%.
- Conversely, no income group with an AGI of at least $500,000 received an average tax cut exceeding 9%.
- The average tax cut for brackets starting at $1 million was less than 6%.
- “That means most middle-income and working-class earners enjoyed a tax cut that was at least double the size of tax cuts received by households earning $1 million or more,” The Hill notes.
- “The fact is, Republicans’ 2017 tax reform law did exactly what was promised: It lowered taxes for all income groups, provided the greatest benefits for middle-income households, and spurred economic growth that helped reduce poverty and improve prosperity.”
- President Trump posted a link to the piece from the Hill on Tuesday in an official message (see below).
THE HILL REPORTS:
What’s more, IRS data shows earners in higher income brackets contributed a bigger slice of the total income tax revenue pie following the passage of the tax reform law than they had in the previous year.
In fact, every income bracket with filers earning $200,000 or more increased its tax burden in 2018 compared to 2017, and every income bracket with a top limit lower than $200,000 paid a smaller proportion of the total personal tax revenue collected.
That means that Republicans’ tax reform law resulted in the tax code becoming slightly more progressive — the exact opposite of what Democrats have claimed over the past four years.
The IRS data further shows that the tax reform law — which included a variety of business tax cuts, including a large reduction in the corporate income tax rate — spurred economic mobility.
Every income bracket with a top level lower than $25,000 experienced a reduction in its number of filers, and every income bracket above $25,000 increased in size, with the biggest gains occurring in the brackets with a floor of at least $100,000.
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It would be a grave mistake for Democrats to eliminate key parts of this important legislation.
