The Losers And Winners Of The Trump Administration's Big Tax Cut
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For most Americans, this is the day when federal income taxes are due. 2018 was the first year in which the Trump administration's big tax cut took effect. The bill lowered taxes for most people, but not for everyone. NPR's Jim Zarroli looks at who the winners and losers are.
JIM ZARROLI, BYLINE: The 2017 tax cut was President Trump's biggest legislative accomplishment to date. It sharply lowered the corporate tax rate and allowed businesses to bring home the money they made overseas tax-free. But it also cut taxes on people. Here was Trump in his 2018 State of the Union address.
(SOUNDBITE OF 2018 STATE OF THE UNION ADDRESS)
PRESIDENT DONALD TRUMP: Millions of Americans will have more take-home pay starting next month - a lot more.
ZARROLI: And that was true. Mark Mazur of the Urban-Brookings Tax Policy Center says people at every part of the income spectrum benefited at least a little from Trump's tax cut.
MARK MAZUR: Low-income families with children might see a tax cut of $50 or $100 a year. In the middle-income categories, the tax cuts would be several hundred dollars.
ZARROLI: And he says high-end taxpayers may have saved thousands, or even tens of thousands of dollars. Though Trump initially promised that rich people would be hurt by his tax bill, they weren't, says former Obama administration official David Kamin.
DAVID KAMIN: Those at the top are not paying, on average, more because of this bill. Quite the opposite - they're getting a disproportionate amount of this tax cut.
ZARROLI: Still, most people - some two-thirds of American taxpayers - got a tax cut, says Mark Mazur. But Mazur says there's a problem for Republicans.
MAZUR: I think a lot of Americans don't really seem to feel that tax cut.
ZARROLI: In surveys done over the past year, most Americans say they don't think they benefited from the cut, even when they did. David Kamin says the tax cut kind of got lost.
KAMIN: For middle- to low-income Americans, the tax cut was not all that large. It was then spread out over time as, you know, they would just get a somewhat bigger paycheck immediately.
ZARROLI: As a result, a lot of people didn't even realize they got a tax cut. The bill also created some geographic winners and losers. It sharply cut the amount of money people could deduct for state and local taxes, which hurt millions of people in high-tax states, such as New Jersey and California.
KAMIN: That's not the vast majority of Americans, but there are a relatively small number who do immediately face a tax increase under the bill.
ZARROLI: And it barred taxpayers from deducting business expenses, such as computer software or magazine subscriptions. The Tax Policy Center says about 6 percent of Americans saw their taxes rise as a result of the bill. And Kamin says the bill will have another harmful effect.
KAMIN: When you begin to think through what this tax bill means over the long term, it becomes clear this is likely to leave most Americans worse off.
ZARROLI: He says the tax cut has meant less revenue coming into the government. The federal debt is growing. That will have to be paid eventually, either through higher taxes or cuts in government services. And there's one more unpleasant fact. Under the tax bill, the cuts for individuals are set to expire after 2025. So unless Congress decides to extend them, people will end up paying more once again.
Jim Zarroli, NPR News, New York.
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