Friday, December 22, 2017

Trump Tax Reform Tax Cut Will Be Smaller for the Middle Class Than Obama's 2009 Tax Cut

Remember Obama's 2009 tax cut? No, neither do I.

Paul Krugman writes:
[C]omplicated things will happen to individual taxes: Some deductions will increase, others will be cut. Next year, most people will probably see a small tax cut, although for the middle class it will be a smaller cut than the one they got from Barack Obama in 2009 — a tax cut almost nobody noticed.
Krugman is correct here. There is a lot of shifty stuff going down.

When you see something like: "70% of taxpayers will get tax cuts," this doesn't mean a damn thing until you know how much will be the tax cut per taxpayer and how much of an increase those who get tax hikes will experience.  As an extreme example to understand why the percentage standing alone doesn't mean anything, suppose the average cut is only a dollar across the 70% but the tax hikes for the 30% is $25,000 per taxpayer. That is a major difference than the reverse.

That these numbers aren't readily being thrown out by the street hustling Trump, or his fake votaries, should tell you something.

Indeed, a Tax Policy Center study cited by Krugman shows that 49.7% of taxpayers will on avergae see a tax cut of only $380 or less. The next group of 19.5% will see on average a tax cut of $980 or $82.00 per month. In total, we are talking 69.5% of taxpayers here, that is 122 million.


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