Republican tax cut led to economic growth and lower income tax in 2018 for most
Sixty-four percent of federal income tax payers paid less tax in 2018 than they would have without the Republican tax cut. Only six percent paid more.
If those numbers surprise you, you may be one who gauges taxes by the size of your tax refund. As withholding amounts were refigured for 2018, your year-end refund may have gone down along with the tax amount you paid.
The Tax Policy Center, run by a former Obama administration official, published “A Last Look at the 2019 Filing Season.” The article makes a number of interesting observations.
First, preparing tax returns got a lot easier for millions. The number of folks who struggled through the process of itemizing their tax deductions dropped from 46 million to about 19 million. About four percent more people prepared their own returns while the number who went to paid preparers dropped.
Among paid preparers, H&R Block reported that its average client paid $1,200 less in taxes in 2018, a drop of 25 percent. Estimates show middle income taxpayers — those making $50,000 to $80,000 per year — averaged $800 less in taxes.
The Government Accountability Office estimated last July that as many as five million fewer taxpayers would receive refunds. In fact, 303,000 more taxpayers received refunds this year compared to 2017. Average refund amounts were about the same in 2018 as they were in 2017.
Since many taxpayers look at the size of their refund instead of actual taxes paid, that’s good news for tax reform supporters.
The number of low-income folks who paid no income tax in 2018 rose to 44 percent of all taxpayers. More good news: Some 14 million more households were able to claim the child tax credit in 2018.
Those are the facts. But the taxpaying public has been fed a steady diet of misinformation by Democrats and their lapdogs in the mainstream media.
A Gallup poll in early April of this year showed that 21 percent of taxpayers believed their taxes increased while only 14 percent believed theirs went down. Reflecting what they hear on their chosen news sources, 28 percent of Democrats believe they are paying more tax while only 14 percent of Republicans think so.
These poll results make one wonder if Gallup’s sampling was representative. Since the poll was taken before the April 15 tax filing deadline, perhaps many respondents hadn’t yet figured their taxes. Regardless, polls are one thing, facts are another.
All of the above compares actual 2018 taxes paid with taxes if Congress had done nothing. If your income increased thanks to our booming economy, you may have paid more tax in 2018 with the new tax law than you did in 2017 with the old law. But it’s highly likely you’d have paid even more in 2018 without tax reform.
Our economy grew at a blowout 3.2 percent pace in 2019’s first quarter. The Republican tax cuts have spurred the economy into high gear, leaving the Obama economy in the dust.
Because of this growth and the new jobs that go with it, federal tax receipts increased one percent in the first six months of this fiscal year compared to last year. The federal deficit has grown by $103 billion, not due to tax cuts but because runaway federal spending grew five percent.
Democratic economists have egg on their faces. In 2017 Larry Summers, Obama’s National Economic Council director, called Trump’s 2018 three percent growth assumption “ludicrously optimistic.” Only days before this year’s 3.2 percent growth figures were released, Princeton’s Paul Krugman wrote in the New York Times, “The tax cut fizzled; send in the clowns!”
Contrary to what you are hearing from clowns on the left, our economy is on a path of sustained growth, a “clear break” from the Obama years. Picking up a musical theme from the early days of Franklin Roosevelt’s presidency, happy days are here again.
The viewpoints expressed above are those of the author and do not necessarily reflect those of The Independent.
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Articles related to “Republican tax cut led to economic growth and lower income tax in 2018 for most”
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Really sad reading this pathetic propaganda. Mango Mussolini was GIFTED the economy he got. He did nothing to achieve it. Not sure what’s so hard to see about that. But I guess when you have your head so far up Trump’s a$$, it’s hard to see anything clearly.
You people who constantly attack Obama, who I didn’t really care for, are freakin’ pathetic. At least Obama was articulate in his speech even if he was blowing smoke. Trump is the president of morons.
Exciting. Another motivational propaganda article from Mr. Howard Sierer.
I am excited to know that I’m in the 6% bracket…I am one of those who got to pay more income tax this past year! Thank you Howard and thank you Donald.
It is also exciting to learn that our economy is booming. First quarter growth at 3.2% is a good number.
However, you failed to mention that personal consumption expenditures were only up a minuscule 1.2% Is this perhaps a lack of discretionary consumer funds?
Oh, and did you happen to forget to mention the one trillion dollars added to our Federal Debt in the past six months (nearly a new record). We have made it up over 20 trillion in debt. Congratulations to us!
You complain about “runaway federal spending” which grew at 5% according to your numbers. Part of that is the fact our population grew.
Finally, I an curious to know if you understand the difference between socialism as a form of government (which you seen to rant about) and social programs, which help our population? Or, perhaps you are being purposely obtuse by fear-mongering? You know about social programs, right: Things like the Interstate Highway System, Public Education, all branches of the Military, the Prison System, various Public Utilities,
National Parks and Monuments, welfare bailouts to Corporations and Farmers, and so on.
Let’s get a few of your claims replaced with facts:
If you paid more tax in 2018 than you did in 2017, most likely it’s because (as I stated clearly) your income was noticeably higher last year. In that case, you still paid less than you would have if tax reform hadn’t been enacted. If you are in fact one of the 6 percent who paid more under the new law than you would have under the old, you either own property or live in a high tax state like California where the new tax law limited your state and local tax deduction to $10,000. If that’s the case, your income greatly exceeds the vast majority of Americans: you get little sympathy from most of us.
Next, personal consumption expenditures (keyword: expenditures) were up modestly in significant part because the personal savings rate is up dramatically. https://tradingeconomics.com/united-states/personal-savings That bodes well for those saving for future retirement and since those savings are invested in today’s economy, adding to capital investment, worker productivity and future wage growth. While personal expenditures were up only modestly, wages were up 2.9 percent through Sep 2018 per the Washington Post, the fastest since before Obama took office. https://www.washingtonpost.com/business/economy/us-workers-see-fastest-wage-increase-in-a-decade/2018/10/31/3c2e7894-dc85-11e8-85df-7a6b4d25cfbb_story.html?noredirect=on&utm_term=.634f703152d9
The federal deficit increased $693 billion, only $94 billion more than the previous year prior to the tax cut, not the $ trillion you claim. Further, that is significantly less than the original CBO forecast. The CBO expects the tax cut to pay for itself in coming decade with accelerated growth. Meanwhile we’re all living better.
Population growth, about 1 percent last year, is not the primary driver of government spending. Instead it’s the increasing number of citizens receiving Social Security and Medicare benefits coupled with (modest) inflation that increases benefit amounts. Virtually all economists agree that these programs are unsustainable without some combination of tax increases or benefit cuts.
Social Security, Medicare, Obamacare, Medicaid, student loans et al are social programs instituted by a democratic capitalist government. Along with most Americans, I don’t oppose these programs per se. I do have problems with how they are continually expanded without the tax increases needed to keep the country solvent. The day of reckoning is coming.
FYI, Interstate highways, public education, the military, prisons, public utilities, national parks and monuments are NOT social programs. They are all legitimate functions of democratic government. Corporate bailouts and farm price supports are social welfare programs of dubious value.
The Green New Deal is socialist on it face, calling for government control over much of the nation’s economic life. I strongly oppose that and am shocked and disappointed that many of the Democratic presidential hopefuls have endorsed it. When Nancy Pelosi, who clearly opposes it, is the Democratic Party’s voice of reason, it’s clear the party is going off the rails to the left at high speed.
What’s wrong, Howard?
Scared sh!tless those big bad Dems are going to take away your right to propagandize?
You should be. America is about to make a hard left turn. I can smell your fear from here.