Democrats including President Biden, Nancy Pelosi, Chuck Schumer, and most of the mainstream media have trotted out the claim that President Trump's tax cuts only benefited wealthy Americans. This dubious line has been used in attempts to justify the tax increases that will be necessary to fund President Biden and congressional Democrats' woke and expensive Build Back Better Act that now faces an uphill battle in the United States Senate. The only problem with their claim about Trump's tax cuts, not a rare one for Democrats seeking to force their agenda on the American people, is that it's just not true.
Thanks to data review and number crunching done by the Heartland Institute's Justin Haskins and published over the weekend in The Hill, the IRS' own ledgers prove that, as Republicans in Congress and President Trump said, the Tax Cuts and Jobs Act gave the most tax relief to working-class Americans — not the wealthy who Biden says need to "pay their fair share."
As it turns out, and contrary to what Democrats are asserting, the Trump tax cuts led those with an adjusted gross income of $15,000 to $50,000 to see an average tax cut of 16 percent to 26 percent in 2018, the first filing year under Trump's tax policy.
Those making $50,000 to $100,000 saw a reduction in their tax bill of 15 percent to 17 percent. Americans earning $100,000 to 500,000 saw a tax cut between 11 percent and 13 percent. As Haskins explains in his op-ed on the data in The Hill, "by comparison, no income group with an AGI of at least $500,000 received an average tax cut exceeding 9 percent, and the average tax cut for brackets starting at $1 million was less than 6 percent."
The Trump tax cuts also increased the amount of revenue brought in through federal taxes, another validation of the theory made legendary by economist Dr. Arthur Laffer. There's a sweet spot on the Laffer Curve when it comes to federal taxes that allows a lower overall tax rate to get the maximum amount of revenue. Raising taxes beyond that point just leads to less income for the government, negating the argument that taxes must go up in order to fund new spending.
But back to the IRS data reviewed by Haskins, he found that "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."
In other words, Trump was right and Democrats were wrong — both then and now. As Haskins points out, Trump's adjustment of the nation's tax policy actually made taxes more progressive, not less. But Biden's party is keen to continue its lies about what Trump's tax cuts did and what Biden's budget would do as congressional Democrats scramble to deliver on Biden's campaign promises ahead of the midterms.
What congressional Democrats included in their Build Back Better Act to fund the Biden administration's woke agenda would undo the progress made by President Trump, harm Americans who are already contributing more now than they were under Obama-era tax policy, and further stunt economic growth as businesses struggle to recover from the Wuhan coronavirus pandemic.