Tax Cuts

There is a lot of misunderstanding regarding Trump’s 2018 tax cuts. Polls say that only 17% of Americans believe that they got a tax cut whereas our IRS says that the actual number is 66%. My own daughter was doubtful that she got a cut because her refund wasn’t as large as before ... forgetting the fact that her tax withholdings throughout the year were smaller. When we went through the numbers together she was surprised at the size of her tax savings.

The media and demagogic Dems have played up the fact that it was corporations and the rich that got the majority of these benefits. Yes, corporations generally did benefit ... which is why the afterburners are on in our economy and the stock market is way up ... benefiting many retirement accounts. But, it is not true that, in general, the wealthy made out like bandits.

Let me explain. The new tax law had two zingers for many plutocrats — mortgage interest payment deductions were capped on loans of $750,000 AND real estate, state and local taxes were limited to a total of $10,000 if itemized. This latter construction meant that high-income people in high-tax states like New York, New Jersey, California, Connecticut, etc. really were punished in the itemized deductions column ... which generally meant that they ended up in that 34% of individuals who payed higher taxes.

Yes, the super-wealthy who could hire tax attorneys may have stopped some of this bleeding but, in general, it was the blue-state six-figure-income earners with big mortgages who payed more, and in many cases, much more income taxes last year.

QED.