Results of the Tax Cuts are In: Reduced Opportunity Costs and Increased Tax Savings
There has been a great deal of discussion about the pros and cons of the tax cuts of 2018. Finally, this year is the first in which Americans filed their tax returns since implementation of the Tax Cuts and Jobs Act, and the results are becoming clear.
Under this tax code, the standard deduction was approximately doubled and income tax rates were lowered across the board, positively impacting every group. The Child Tax Credit was doubled and made available to more families; the Alternative Minimum Tax was eliminated altogether, except the wealthiest families; and the burdensome individual mandate from Obamacare is no longer penalizing individuals who didn’t want to be required to purchase health insurance plans they could neither use or afford.
The jury has been out on the success of the legislation, but opinion is keeping in from some of the biggest names and medias. This includes companies that have been openly hostile to the Trump Administration.
For example, New York Times confirms that “independent analyses have consistently found that a large majority of Americans would owe less because of the law.”
In spite of this reality, many economic naysayers continue to promote both misinformation and outright disinformation concerning the GOP Tax Cuts.
The New York Times continues that “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.”
Now that this tax filing season is ending, the facts are overwhelmingly clear: Under our new tax code, workers get to keep more of their hard-earned money and they are spending less time filing their taxes.
In addition, taxpayers enjoy a simplified Process: Under the new tax code, ninety percent of all families now file using the nearly doubled standard deduction. This leads to savings of both time and money, and leads to millions of taxpayers no longer having to itemize and track numerous receipts.
As the Washington Times reports, this change saved “Americans 41 million hours of filing stress.” Kevin Price, Editor at Large for USA Business Radio and host of the nationally syndicated Price of Business radio show said “that is one of the biggest problem with the US tax system — its demands on the time and even serenity of those who pay for it. This significant reform reduces the “opportunity cost” burden suffered by taxpayers they suffered before the reform.”
The Washington Times finds that, according to the National Taxpayers Union, “the net ‘tax compliance burden’ overall on the individual side was . . . $1.76 billion less than the previous year.” Again, significant relief in the “opportunity cost” department.
Taxpayers are also enjoying more money in their pockets: In addition to saving time, Americans got to keep more of their hard-earned money this year.
H&R Block recently observed that “overall tax liability is down 24.9 percent” this year – meaning workers and families are giving less of their money throughout the year to the federal government. This is especially helpful for the vast majority of families living paycheck-to-paycheck, as they now have more abilityto buy groceries or pay down credit card debt.
In addition, H&R Block finds that refunds are also larger this year than last year or in previous recent years. Not only are taxpayers finding that they have more in each paycheck, they are also getting a larger refund from the IRS this spring.
Rep. Kevin Brady (R-TX), the top Republican on the powerful House Ways and Means Committee, wrote in a recent FOX op-ed: “Tax Day is always a headache. But as long as families and small businesses continue to have first say over their money rather than Washington, the U.S. economy will continue to soar for workers across the country.”
