Tax Day has come and gone, and millions of Americans came away better off than in years past.
Why? Because of the Tax Cuts and Jobs Act (TCJA), the signed into law in 2017. The TCJA lowered rates, increased deductions, and simplified the tax filing process. Its sweeping provisions represent the most significant overhaul of the U.S. tax code since the 1980s, when President Reagan was in office.
It’s not just a talking point: The overwhelming majority of American taxpayers sent less money to Washington, D.C. in 2018. , roughly two-thirds of U.S. households paid less in individual income taxes as a result of the TCJA. (The Tax Foundation is even more optimistic, “the net impact of the TCJA is that 80 percent of filers saw a lower tax liability in 2018.”)
, “On average, all households paid roughly $1,300 less in individual income taxes in 2018 than they would have under the old law.” Based on his analysis, more than 80 percent of America’s middle-class earners—the backbone of the U.S. economy—received some tax relief. This is corroborated by , which points to an overall tax cut of 25 percent—nearly $1,200 per household, in real dollars.
Working Americans are reaping the benefits—across the socioeconomic spectrum. For a family, that extra $1,200 can be spent on an upcoming mortgage payment or that dream vacation. For an entry-level employee, tax savings can be used to cover student loan obligations or a month’s worth of groceries. A lower tax bill means more purchasing power.
It’s not just Republican partisans saying this. Gleckman is by no means a Trump administration official. Nor is President Trump beloved by news outlets like the Washington Post, which “the vast majority of Americans—65 percent—did get a tax cut.”
As the Post acknowledges, the TCJA’s benefits also transcend individual tax cuts. For decades, the U.S. corporate tax rate stood at 35 percent——and dissuaded many employers from doing business on American soil. The TCJA dropped that federal rate to a more competitive 21 percent, providing an incentive for U.S. companies to repatriate funds that were once stashed overseas.
Many have already responded positively to that incentive. In 2018 alone, corporate America , and experts in the near future. , “TCJA-related repatriation” will play a part in “reducing debt and positively [contribute] to private capital formation and GDP.”
Yet, despite its many benefits, the TCJA is one of the most hotly debated pieces of legislation in recent memory. Misconceptions persist, and its critics are vocal.
This has depressed public opinion writ large. The American people remain skeptical of a new tax code that has, by and large, positively impacted their lives. Leading up to Tax Day, more Americans . Overall, most Americans , with only 40 percent expressing support.
There is a clear disconnect here. Of course, the TCJA is not perfect. Reasonable arguments can be made that the new law goes too far in some ways, or doesn’t go far enough in others.
But much of the tax debate is nestled in narrative, rather than reality. In many cases, support for or opposition to the TCJA has more to do with political gamesmanship and ideological purity than honest examination.
And, when honestly examined, the writing is on the wall: Many Americans—from Fortune 500 CEOs to hourly workers—can celebrate the Tax Cuts and Jobs Act.