As the fiscal cliff approaches in 2025, key provisions in the Tax Cuts and Employment Act are set to expire. If Congress doesn’t act, the biggest blows will not be billionaires or Wall Street elites. It was workers and middle class Americans who received the hammer.
For years, the left has pushed the false narrative about the TCJA, passed in 2017 under President Donald Trump. They say it is “A prize for the rich. Senator Elizabeth Warren (D-Mass) wrote,Transfer of wealthFrom working families to billionaires and billionaires. That claim is not entirely true. The Internal Revenue Service data tells a very different story.
Democrats say they care about the families they work for. If that’s true, why are they intrusting the very law that has reduced the tax burden on millions of middle-income Americans?
My new policy research at the Heartland Institute, which I co-authored, analyzed IRS data from 2017 to 2022, assessing the true impact of tax cuts and employment law. The law was passed in 2017 but did not take effect until 2018. Using the latest available tax years (2022), we compared the data to determine how much taxpayers saved on each IRS income bracket after the law came into effect.
Since IRS data for 2023 and 2024 are not yet available, historical averages were used to project savings over the year.
A major tax cut for the middle class
The results are clear. The TCJA has completely reduced its personal income tax rate. However, the biggest winners were operating and middle-class Americans, $30,000-$200,000 a year, at a rate saved. During the period investigated, these families saved thousands.
The breakdown is as follows: From 2018 to 2024, he predicted he would earn between $50,000 and $75,000, saving about $6,300 in federal income tax. Those who make between $75,000 and $100,000 have saved about $8,300. And families making between $100,000 and $200,000 have saved nearly $13,500.
It’s not a gift for the rich. It is a real relief for working families.
High-income earners also benefited, but their relief was modest compared to the savings received by middle-class families.
In 2022, filers, which ranged between $5 million and $10 million, saw the federal tax bill fall by just 2.3% compared to 2017. Meanwhile, households earning between $40,000 and $50,000 have saved nearly 19%. That’s not the economics of trickle-down. It is a targeted relief for working Americans.
Overall, the income group that saw the largest percentage of tax cuts was earning less than $75,000. Within that group, even households making the lowest performance brackets ($50,000 to $75,000) saved just 16% in 2022 compared to pre-TCJA levels. All other brackets in the under $75,000 range saved at least 18%.
Perhaps most notably, the TCJA has actually made more advances in its federal tax code. It shifted the burden of more income tax to higher income earners, while easing it for the workers’ families.
IRS data from 2017 to 2022 shows clear trends. After the TCJA came into effect, households earning less than $200,000 had a lower percentage of all personal income taxes, while households earning more than $200,000 won the majority of the national tabs.
Uncovering the myth of deficits
This contradicts the left-wing favorite claim. That means Trump’s tax cuts will drain federal revenues and explode the deficit. Yes, the deficit has worsened since the TCJA came into effect, but not because of tax revenue collapse. The truth is the exact opposite.
In 2017, the IRS collected approximately $3.5 trillion in total tax. By 2022, those numbers had jumped to nearly $5 trillion. In 2022, the collection of personal income tax alone reached $2.13 trillion. It’s been an increase of $50 trillion since TCJA became law.
The TCJA did not starve the Ministry of Finance. Federal income tax revenue has increased significantly since 2017. What fueled national debt and deficits is not lack of revenue, but government spending.
The clock is ticking
The middle class tax cuts are expected to expire at the end of the year. If Congress fails to act, the fallout will be serious. Many middle-income families could face tax cuts of over 18%, costing thousands of dollars over the next few years. Higher earners will face even more rapid increases – economic resistance ripples across the country.
Democrats say they care about the families they work for. If that’s true, why are they intrusting the very law that has reduced the tax burden on millions of middle-income Americans? Why are they trying to undo the progress that helped workers climb the ladders of the economy?
The answer is clear: politics. Democrats opposed the TCJA from the start – not because it failed, but because Donald Trump signed it into law.
But the facts don’t lie. The tax cuts and employment laws worked. It helped lower tax rates, promote economic growth, and help everyday Americans maintain more of what they had acquired.
If Congress immediately intervenes to make cuts permanent, the middle class will once again hold the bill.
