The Trump Tax Cut Did Bubkes for the Working Class

Republicans are unhappy about public perceptions of their tax cut. What happened was simple: they paid lots of attention to the business tax cuts and lots of attention to the tax cuts for this rich, but not so much attenton to the tax cuts for the working and middle classes. The middle classes, of course, pay the bulk of their federal income tax via withholding, and they don’t always notice small weekly changes. What they do notice is their tax refund at the end of the year.

Long story short, the supposed party of the common man didn’t realize that. So when Trump’s Treasury Department changed the withholding schedules, they withheld less in hopes that people would notice that their paycheck was bigger. They didn’t. But the reduced withholding also meant that tax refunds would be smaller than usual. People did notice that. Thus the public perception that they got screwed by the tax cut. Over at National Review, Ramesh Ponnuru tries to explain this away:

The Times article that Robert VerBruggen highlights below suggests that Democrats have been successful in misinforming the public about how many Americans have gotten a tax cut from the Republicans. But it’s probably not just political spin, or the design of that tax law, that caused people to underestimate the extent of the tax cut. Previous tax cuts have landed the same way. President George W. Bush, in his first term, passed two tax cuts that cut tax bills for everyone who paid income tax and raised taxes on nobody. In 2004, a New York Times/CBS News poll found that fewer than one in five Americans thought they had gotten a tax cut.

So here’s the thing. As Republicans are fond of pointing out, about half of all Americans don’t pay any federal income tax. They’re students, or they’re poor, or they’re on disability, etc. Another 20 percent pay so little in taxes that tax cuts are virtually invisible. So right off the bat, somewhere around 70 percent of Americans really didn’t see any benefit from George Bush’s tax cuts. That’s not very far off the number in the Times poll.

Roughly the same is true of the 2017 Republican tax cut. The working class saw a tax cut of less than 1 percent on average (second quintile in chart below). That comes to maybe $300, or about $6 per week. Is it any surprise that these taxpayers aren’t exactly brimming over with excitement?

Republicans gave the working class (and the middle class) a temporary and minuscule tax cut while the rich got a big, permanent one. Then, because they don’t really understand the middle class at all, they futzed around with the withholding tables so that lots of people got smaller refunds. Then they wonder why ordinary people aren’t impressed. The answer is simple: it’s because they got close to nothing except a big surprise on tax day. Why would you expect them to be anything but resentful over that?

Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

payment methods

Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate