Now that a little thing called economic reality has overtaken months of dishonest media reporting about the Republican tax bill signed into law by President Trump last month, a plurality of 47 percent support the bill, while only 34 percent remain opposed.
This is a huge (and predicable) turnaround when compared to those polls released in the heart of the media campaign to kill the tax bill. In early December, Gallup showed just 29 percent support for the bill; as did Quinnipiac. Less than a month ago, the left-wing cable news network CNN released a poll that showed support for the bill cratering with opposition climbing from 45 percent to 55 percent. Only one-third of Americans were in favor of the tax cut.
Considering the media’s 24/7 opposition to the bill, these negative polls were not all that surprising. In a cynical and partisan effort to kill the GOP tax cut through the use of lies to gin up opposition, including the wildly false claim that only the rich and corporations would benefit, some outlets even went so far as to claim that taxes on working people and the middle class would increase. And polls showed that too many people actually believed that nonsense.
Thankfully, neither the GOP nor President Trump blinked. The important bill passed late last month (strictly along party lines) and the benefits to working Americans was immediate. So far, thanks to the lowering of their taxes, 164 corporations have announced substantial bonuses and pay raises. That means some two million workers are already enjoying the trickle-down effect of the most consequential tax reform in 30 years.
President Donald Trump’s “big, beautiful Christmas present” to the American people came Dec. 22, when he signed into law a tax plan that will benefit business owners big and small and give individual taxpayers a slight break in 2018.
The GOP didn’t fulfill their promise of simplifying the tax code—you’re not going to be able to file your taxes on a postcard any time soon, and experts say changes to business rates will likely lead more people to try to game the system. But they did change the number of tax brackets from seven to...seven and eliminate some popular deductions.
When It Takes Effect
The tax plan starts to take effect January 1, 2018, meaning it doesn’t affect the taxes you file in April 2018 (unless you make a few last-minute moves). Some aspects of it won’t be implemented until 2019 or beyond.
Tax brackets, for example, change on January 1, 2018, to the following:
The IRS announced that workers could begin seeing the difference in withholding in their paychecks as early as February. The new brackets expire after 2025. As Marc Goldwein, senior policy director for the bipartisan Committee for a Responsible Federal Budget, told Vox, “People get eight years of tax reform.”
The individual mandate for health insurance will be repealed starting in 2019, meaning if you don’t purchase health insurance next year you’re still liable for the penalty. The Congressional Budget Office estimates 4 million fewer people in 2019 and 13 million fewer in 2027 will have health insurance as a result.
The Tax Cuts You Can Expect on Average
Republicans are hailing the legislation as a major victory for the middle class. In the very near term, the middle class will benefit: All income groups will receive a cut, on average, in 2018, according to the nonpartisan Tax Policy Center, which estimates the average cut will be $1,600 in 2018.
How does this work?
- Standard deduction: For many people, the standard deduction will be essentially doubled, from $6,350 for individuals to $12,000, and from $12,700 for married couples filing jointly to $24,000. You won’t see this change until you file your taxes in April 2019.
- Child tax credit: Another benefit to many middle class workers is the doubling of the child tax credit to $2,000 for dependents under 17, $1,400 of which is refundable (meaning if the credit is larger than your federal income tax liability, you can receive a refund of up to $1,400). More high-income earners will also qualify for this credit now. This expires in 2025. (You can also reduce your tax bill by up to $500 for other dependents, like children over 17 and elderly relatives.)
- Personal exemptions: Personal exemptions, which reduce your taxable income, are eliminated. Currently, you’re allowed to claim a $4,050 personal exemption for yourself, your spouse, and your dependents (up to a certain amount). The doubling of the standard deduction could go a long way to make up for this, but the elimination could negate the benefits for families with three or more kids.
But the bill is much more of a win for the wealthiest Americans and business owners. One of the main criticisms of the plan is that the tax cuts are not allocated equally across the income spectrum. Taxpayers earning between $308,000 and $733,000 would receive the largest tax cut. According to TCP, middle-income taxpayers (those making between about $49,000 and $86,000) would pay about $900 less (or about 1.6% of after-tax income) in 2018, while those earning $733,000 and up would get an average tax cut of roughly $50,000 (or 3.4% of their after-tax income). If you earn $65,000, you’ll save about $930 in 2018, per TCP. If you make $500,000, you’ll save around $13,480.
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