Chuck Grassley

United States Senator from Iowa

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ICYMI: IRS Data: Middle Class Americans Saw Biggest Tax Reduction from Trump Tax Cuts

Sep 23, 2020
By Alex Hendrie
Published September 22, 2020
 
The IRS has released 2018 Statistics of Income (SOI) data. 
 
This data shows that middle income American families saw the biggest tax cut – measured as the percentage decrease in "total tax liability" between 2017 and 2018 – from the Trump-Republican Tax Cuts and Jobs Act (TCJA).
 
Total tax liability includes federal income taxes as well as taxes listed on IRS form 1040 such as social security taxes on self-employment income and tax applicable to individual retirement arrangements (IRAs).
 
As the data notes, Americans with incomes between $50,000 and $100,000 saw their tax liability drop by twice as much as Americans with income above $1 million:
 
  • Americans with adjusted gross income (AGI) of $50,000 to $74,999 saw a 13.2 percent reduction in average tax liabilities between 2017 and 2018. 
 
  • Americans with AGI of between $75,000 and $99,999 saw a 13.6 percent reduction in average federal tax liability between 2017 and 2018. 
 
  • Americans with AGI of $1 million or above saw a 5.8 percent reduction in average federal tax liability between 2017 and 2018, less than half the tax cut seen by Americans with AGI between $50,000 and $100,000.
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