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Let’s all agree: There is no political issue that touches more people than taxes. 2017 saw the biggest overhaul to the tax system in over 30 years, and this tax filing season is the first year that people are fully realizing the impact of those changes.
Now that tax season has finally come to an end the data is in on how the new tax laws and tax cuts are impacting households.
Per The New York Times, there is a big disconnect on what actually happened, and what people think happened.
According to estimates from The Tax Policy Center, 65% of people paid less in taxes this year under the new law, while just 6% paid more. The rest saw very little change.
The Joint Committee on Taxation found that every income group got a tax cut, too.
Not even one in ten households actually saw their taxes go up, per The New York Times, when all was said and done.
Interestingly, while most people saw their taxes go down (or not change) most people don’t believe they received a tax cut under the new law.
The New York Times conducted a survey with SurveyMoney in early April and just 40% of Americans believe they got a tax cut.
The Gray Lady points to a few reasons for why perception is so off: One, Democrats have been strong on their attack of the policy change. Two, while a majority of people did get tax cuts, for a lot of Americans, the savings were relatively minor. Three, the bulk of the tax cuts went to the wealthiest of Americans and corporations, leading to anger and a skewed perception of the tax cuts. Lastly, because the new tax cut showed up in the form of lower withholdings, some people ended up with smaller refunds than last year or even owed money after they filed–only further skewing perceptions.
Bottom line: While we can all debate the merits of the new tax law until the cows come home (and we probably will because of the upcoming presidential election) let’s get our facts straight on this.
Be sure to watch our breakdown of how tax brackets work below to get even more informed!
Feature Image: Twenty20
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