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Op-Ed: The truth about Trump’s tax cuts by the numbers, not by Biden: Andy Puzder

This article originally appeared on Fox Business on November 1, 2020.

Democratic presidential nominee Joe Biden often talks about repealing President Trump’s “tax cuts for the wealthy,” claiming in a recent town hall that “about $1.3 trillion of the $2 trillion of the tax cuts went to the top 1/10th of 1 percent” of earners. But did the Tax Cuts and Jobs Act (TCJA) disproportionally benefit high earners? Comparing the income tax data for 2017 (the year before the TCJA became law) with 2018, clearly demonstrates that it did not.

According to the nonpartisan Tax Foundation, the TCJA reduced effective tax rates “for all income groups in 2018.” Because we have a progressive tax system, high earners pay the highest rates and received the largest rate reductions. However, lowering rates for a group of taxpayers does not necessarily reduce their share of the tax burden.

Let’s look at the TCJA’s impact on the top one percent of taxpayers. In 2018, 1.6 million taxpayers reported earning $500,000 or more. While the amount all taxpayers owed the IRS in 2018 declined by $64 billion, the amount these high earners owed increased by $16 billion.

Their share of the tax burden also increased. They accounted for 22 percent of total income in 2018 (a 0.5 percentage point increase over 2017) but their share of total income taxes rose to 40 percent (a 2.3 percentage point increase).

Click here to read the full article.

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