[Three-line summary]
1. Trump's tax cut does not have a dramatic influence on the U.S economy.
2. According to a study by the Federal Reserve Bank of Dallas His tax bill, the bill created 6,500 of the 2.7 million jobs but accumulated the deficit from $585 billion in 2016 to $984 billion in 2019.
3. Trump and Joe Biden both of them does not care about this bill a lot because voters are not susceptible on this issue.
Trump Tax Cut Was Neither Bane Nor Boon
Ignore the campaign claims on both sides. The 2017 law didn’t favor the rich or boost the economy. (It did pump up the deficit, but how many voters care about that?)
By
President Donald Trump’s main legislative accomplishment as he runs for re-election is the Tax Cut and Jobs Act that he signed at the end of his first year in office. It is the linchpin of the Republicans’ case that their economic policies have worked. Trump’s Democratic opponent, former Vice President Joe Biden, has said that he will repeal the tax cut if he wins, or at least repeal some of it. To the (very limited) extent this campaign will be a debate about public policy, the tax bill will be one of its main subjects.
The bill was complex and unwieldy legislation with many moving parts. Many people saw some of its provisions raise their tax payments while others reduced them. Perhaps it is not surprising, then, that neither side’s talking points about the law really hold up to scrutiny.
The Democrats’ chief charge has always been that it was a huge giveaway to the rich. “All of it went to folks at the top and corporations,” Biden said in 2019. Tax experts have been less hyperbolic but made a similar point. The Tax Policy Center, for example, estimated that more than 20% of the bill’s tax cuts went to the highest-earning 1% of Americans.
That statistic looks less shocking, however, when you consider that these top earners pay a large share of federal taxes, both because they make a large share of the nation’s income and because federal taxes are progressive. The law left them paying roughly the same share of all federal taxes as before. The Joint Committee on Taxation concluded that households making more than $1 million in 2021 would have paid 19.2% of all federal taxes if the law hadn’t passed, but will pay 19.6% since it did. Some taxpayers in each income category got hit with net tax increases —there’s that complexity again —but overall, each group got roughly a proportional cut in average tax rates.
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