The Corner

U.S.

Americans Explain What the 2017 Tax Cuts Actually Did for Them

(Pawita Warasiri/EyeEm/Getty Images)

Kiplinger’s Personal Finance magazine surveyed 852 taxpayers in December about the tax cuts enacted in 2017, and how it affected their income taxes. The results will probably disappoint both fans and critics of the tax cuts. When asked how the 2017 tax changes affected their last return, 59 percent said, “my taxes remained the same,” 22 percent said they owed less, 19 percent said they owed more.

The magazine noted, “the tax overhaul lowered tax rates and expanded income thresholds, but employers also reduced withholding for many wage earners.” (In other words, the employer reduces the withholding, the take-home pay increases by a small amount, and when the taxes are done in spring, the overall tax bill or refund is about the same as it was before, so the changes may too small for the taxpayer to feel noticeable.) After paying their 2018 taxes, few respondents felt the need to change their withholding — 88 percent said they kept it as is, 8 percent said they had more taken out of their paycheck, and 4 percent said they had fewer taxes withheld.

Fifteen percent of respondents said they couldn’t deduct state and local taxes that exceeded $10,000. (This issue has turned into a crusade for House Democrats, who are now determined to reduce the tax burden on those in high-tax jurisdictions in New York and California.)

Perhaps the most troubling result was the 20 percent of respondents who said they decreased the amount they donate to charity, in part because the lower rates and larger standard deduction made it less worthwhile to itemize deductions. (Only 17 percent said they itemized their deductions on their last return. Another 38 percent said they used to itemize but now just claim the standard deduction.) But 66 percent said they gave regardless of tax breaks, 8 percent said they combined two or more years of charitable giving into a single year to qualify for the deduction, and 3 percent said they were over 70 and now give to a charity directly from their Individual Retirement Account.

I find this poll useful because none of the questions was about whether the respondent supported the tax cuts or thought they were a good idea, or how the respondent felt about President Trump or Congress. While it is possible that respondents underestimated or overestimated the changes to their tax bills, none of the questions would set off the cycle of motivated reasoning.

To hear a lot of Republicans tell it, the tax cuts put a lot more money in Americans’ wallets, and to hear a lot of Democrats tell it, the tax cuts were a disastrous giveaway to the rich that socked it to the middle class. Judging from these poll results, most Americans didn’t feel much of an impact either way.

Most Popular

Politics & Policy

Five Thoughts on the George Floyd Story

After a night of riots, looting, and arson in Minneapolis to protest the police killing of George Floyd, five thoughts spring to mind: One: It is always hazardous to draw sweeping conclusions about society from individual criminal cases. Every individual case involves individual facts, and those facts often ... Read More
Politics & Policy

Five Thoughts on the George Floyd Story

After a night of riots, looting, and arson in Minneapolis to protest the police killing of George Floyd, five thoughts spring to mind: One: It is always hazardous to draw sweeping conclusions about society from individual criminal cases. Every individual case involves individual facts, and those facts often ... Read More
White House

There’s No Fix for Trump’s Bad Tweets

Whether social media have been good or bad for society is an open question. Whether social media have been good or bad for President Trump isn’t as difficult to discern. For even the most sober-minded and introspective figures, Twitter can serve as a dangerous temptation. For a man as capricious and mercurial ... Read More
White House

There’s No Fix for Trump’s Bad Tweets

Whether social media have been good or bad for society is an open question. Whether social media have been good or bad for President Trump isn’t as difficult to discern. For even the most sober-minded and introspective figures, Twitter can serve as a dangerous temptation. For a man as capricious and mercurial ... Read More
Economy & Business

Boiling Over

Andrew Ross Sorkin’s frustration over having missed so much of the post-COVID realities in markets and economic life boiled over this morning in one of the more outrageous outbursts I have ever witnessed on financial media. Perhaps this outburst was rivaled only by his behavior during the March COVID market ... Read More
Economy & Business

Boiling Over

Andrew Ross Sorkin’s frustration over having missed so much of the post-COVID realities in markets and economic life boiled over this morning in one of the more outrageous outbursts I have ever witnessed on financial media. Perhaps this outburst was rivaled only by his behavior during the March COVID market ... Read More
Economy & Business

The Spread of the Debt Virus

The current U.S. budget deficit could soon exceed a record $4 trillion. The massive borrowing is being driven both by prior budget profligacy and by a hurried effort by the Donald Trump administration to pump liquidity into a quarantined America. The shutdown has left the country on the cusp of a ... Read More
Economy & Business

The Spread of the Debt Virus

The current U.S. budget deficit could soon exceed a record $4 trillion. The massive borrowing is being driven both by prior budget profligacy and by a hurried effort by the Donald Trump administration to pump liquidity into a quarantined America. The shutdown has left the country on the cusp of a ... Read More

The Need to Discuss Black-on-Black Crime

Thomas Abt’s book Bleeding Out (2019) has garnered a fair amount of attention for its proposals to deal with gun violence in mainly black urban neighborhoods. The entire focus of the book is on interventions in high-crime locations to stem the violence, including: hot-spots policing, working with young males at ... Read More

The Need to Discuss Black-on-Black Crime

Thomas Abt’s book Bleeding Out (2019) has garnered a fair amount of attention for its proposals to deal with gun violence in mainly black urban neighborhoods. The entire focus of the book is on interventions in high-crime locations to stem the violence, including: hot-spots policing, working with young males at ... Read More