On December 20, 2017, the U.S. House of Representatives and Senate passed a new tax law, commonly known as the Tax Cuts and Jobs Act (TCJA).1Since the fall of 2017, the legislation, which provides huge tax cuts for the wealthy and corporations, has been consistently unpopular with voters.2 Its proponents, however, frequently pushed claims and promises that ranged from aggressive puffery to outright lies. A year after the law’s passage, the major promises made by the TCJA’s proponents have been exposed as hollow.3 Here is the reality of the TCJA’s impact thus far.
Tax cuts primarily benefit the wealthy
Promise: “Any reductions we have in upper-income taxes will be offset by less deductions, so there will be no absolute tax cut for the upper class.” – Treasury Secretary Steven Mnuchin, November 20164
Reality: The TCJA showered massive tax cuts on the richest Americans. The highest-earning 1 percent can expect tax cuts averaging more than $51,000 in 2018 alone—more than what the median American worker makes in a year.5 Even when considering the tax cuts as a percentage of income, the benefits for the richest far exceed those for the middle class. (see Figure 1) American voters have overwhelmingly recognized the tax bill as primarily a giveaway to the wealthy. President Donald Trump essentially admitted as much when he floated the idea of a 10 percent tax cut for the middle class only weeks before the 2018 midterm elections.6 The Administration has since dropped the idea.7
