The American people remain badly misinformed about the tax cuts Republicans and the Trump administration gave them last year.
Two-thirds of American taxpayers will pay less in taxes for their 2018 earnings, according to the independent Tax Policy Center. Eighty-one percent of the middle one-fifth of income earners received a tax cut. Just 5.5 percent of households got a tax hike of $100 or more—and most of those were in the upper-income tax brackets.
Yet far from celebrating their lower tax bills as they prepared to file for the April 15th deadline, many Americans remain convinced they got no tax cut at all—or even that their taxes went up. An NBC/Wall Street Journal poll in April showed that just 17 percent of Americans believe their taxes have been cut. A shocking 28 percent say they believe their taxes went up. Other surveys have consistently found that less than one-third of Americans think they got a tax cut.
This wide gap between public perception and reality is a testament to the effectiveness of the propaganda campaign waged by the Democratic party to falsely portray the 2017 tax law as hiking taxes on the middle-classes while cutting taxes only for the wealthy.
“To a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained — and misleading — effort by liberal opponents of the law to brand it as a broad middle-class tax increase,” a recent column by the New York Times explained.
It is not as if the tax cuts were too small to notice. Forty-eight percent of households are getting a tax cut greater than $500, according to the non-partisan Joint Committee on Taxation. The middle fifth of earners received about a $780 tax cut last year on average, according to the Tax Policy Center.
These cuts, however, came in the form of lower withholding amounts—meaning the government took less out of workers’ paychecks. That means their impact was spread out throughout the year instead of coming as a large refund windfall at tax time. So, for many middle-income Americans, the tax cut came in the form of a $30 boost to biweekly paychecks.
Economically, this likely made sense. It likely helped sustain the growth in consumer spending last year. But as a political matter, it appears to have been a failure because many Americans either did not notice or did not attribute the boost to the tax cuts.
The tax cut could have been made retroactive, applying to 2017’s earnings. This would have given taxpayers huge refunds in 2018 shortly after the passage of the cuts. It may also have boosted consumer spending by even more, at least midway through the year when the bigger than expected refunds hit bank accounts. But it also would have increased the official estimates of the deficit impact of the taxes and made passage by Congress more difficult.
One of the things done to reduce the official estimates of the deficit created by the tax cuts likely made it much easier for Democrats to attack. To shrink the deficit impact in the future in an effort to appease Congressional rules that would otherwise have required a super-majority to pass the law, Republicans made the cuts to individual tax rates expire after a decade—even while announcing that they planned to make these permanent in the future.
This was not particularly unusual. History is rife with examples of temporary changes to the tax code that end up extended in perpetuity. But Democrats and the media focused attention on the unlikely, far-off expiration of the tax cuts to portray the bill as hurting the middle-class.
A disproportionate level of media coverage honed in on the very small number of taxpayers whose taxes could go up due to caps on the state and local tax deduction. In truth, very few taxpayers earn enough to hit the cap, and most of those receive a tax cut from the lower rates and higher standard deduction. The number of taxpayers actually hurt by the 2017 law—meaning, they would pay more in taxes than they would have under prior law—is vanishingly small.
Perhaps that impression will change. Media outlets are now presenting a far more balanced picture of the tax cuts even as Democrats continue to bash it with false claims. “Face It, You Probably Got a Tax Cut,” the New York Times announced in a Sunday headline. “Trump Gave Most Americans a Tax Cut and They Didn’t Notice,” Bloomberg’s story proclaimed.
Not everyone, however, is susceptible to the influence of reality. Democrats, particularly, are resistant to believing that any program advanced by the Trump administration has benefited them. They are, for example, far less likely to believe they got a tax cut than Republicans. According to one poll, only 25 percent of Democrats believe they got a tax cut, versus 40 percent of Republicans. And only 21 percent of Democrats approve of the overall tax cuts, compared with 81 percent of Republicans.
Republicans won a tremendous victory for the bank accounts of most Americans when they passed the tax cut law. But they have not yet won the battle for the hearts and minds of the people with those accounts.