Happy Tax Day! Unfortunately, the 16th Amendment still exists, which means everyone pays federal taxes. Today is the due date so you better get it in or else the IRS will come after you for the money they believe belongs to them.
But I digress. Remember that tax plan that passed in late 2017? The left pounced and convinced people they would not receive a tax cut. Some even believed they would see a tax increase.
Lies. Data has proven the left wrong once again.
In Sunday’s New York Times, economics writer Ben Casselman and economics and tax policy writer Jim Tankersly, penned a piece in an attempt to turn the tide.
They noted how poll after poll showed that people didn’t believe they would receive a tax cut, mainly due to the spin fed to them by the left:
To a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained — and misleading — effort by liberal opponents of the law to brand it as a broad middle-class tax increase.
Yet the data shows 65% of citizens paid less:
The Tax Policy Center estimates that 65 percent of people paid less under the law and that just 6 percent paid more. (The rest saw little change to their taxes.)
Other analyses reached similar conclusions. The Joint Committee on Taxation — Congress’s nonpartisan team of tax analysts — found that every income group would see a tax cut on average. So did the Institute on Taxation and Economic Policy, a left-leaning think tank that was sharply critical of the law. In fact, that group went even further: In a December 2017 analysis, it found that every income group in every state would pay less on average under the law in 2019.
So far, tax season seems to be playing out more or less as the experts predicted. H&R Block, the tax-preparation giant, said last week that two-thirds of returning customers had paid less tax this year than last (excluding people who owed no tax in either year). Taxes were down, on average, in every state.
It all comes down to withholding, which is a conversation I have with my best friend. People have become reliant on the refund check issued by the IRS that they don’t realize they bring a larger chunk home in their paychecks:
“Most people didn’t recognize the increase in take-home pay, or at least didn’t attribute it to the tax cut,” Mr. Rigney said. Some of them might realize it now that they’re filing their taxes, he said, but “it’s little consolation to discover that you received a couple thousand dollars during the year but you already spent it.”
High earners did far better under the law. The top 20 percent of earners received more than 60 percent of the total tax savings, according to the Tax Policy Center; the top 1 percent received nearly 17 percent of the total benefit, and got an average tax cut of more than $30,000. And that’s not even factoring in the law’s huge cut to corporate taxes, which disproportionately benefit the wealthy households that own the most stock.
There’s another reason why people oppose the law, including me. The federal government cut taxes, its so called “revenue,” without cutting spending. What happens when you continue to spend without the needed money coming in? The deficit grows.
This will put the government in a bind when the tax cuts expire. It already has “added hundreds of billions of dollars to the federal deficit.” When the tax cuts expire in a few years, the federal government will have to face reality by either cut spending or raise taxes.
People also protested the law due to the SALT (state and local taxes) deduction, especially from those in high taxed states. The piece in The New York Times found that the “cap definitely had a bigger effect in those states,” yet it “doesn’t mean most of their residents saw a tax increase.” The two men explained:
For one thing, the two-thirds of Americans who took the standard deduction in previous years weren’t taking the SALT deduction, or any other itemized deduction. And most households earning less than $75,000 — as about two-thirds of households in New York State do — were comfortably under the $10,000 cap.
Paradoxically, many higher-income households weren’t getting the SALT deduction, either. That’s because the alternative minimum tax effectively wiped out many deductions, including SALT, for couples earning more than about $250,000 a year. The tax law significantly defanged the A.M.T., meaning most of those households ended up getting a bit of a tax cut.
Those affected by the SALT cap didn’t come out as losers since the tax “law doubled the child tax credit, for example, and made it available to more taxpayers.”
Once again, the mainstream media and the left didn’t have to spin this to cause outrage. The fact that the government cut “revenue” and didn’t cut spending should have been enough to spell trouble for people.
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