Most Americans Got a Tax Cut, But They May Not Have Noticed

Most Americans got tax cuts last year but they don’t think they did, according to the findings of an analysis by The New York Times.

In a survey conducted by research platform SurveyMonkey for the Times, only 39.6% of respondents thought they got a tax cut last year, but an analysis by the independent Tax Policy Center found that 64.8% of Americans got a tax cut. The Times offered the following explanation for the disconnect:

“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.”

Indeed, tax preparation company H&R Block found that on average its clients’ tax liability for the the 2018 tax year is roughly 25% less (nearly $1,200) than it was prior to tax reform.

Taxpayers got most of that savings in their paychecks over the last year once the Tax Cuts and Jobs Act’s withholding tables took effect, as average tax refunds only increased by $43.

As Kathy Pickering, H&R Block’s president of regulatory affairs, told the AP:

“Tax reform represented the largest change to the tax code in 30 years, and on top of that, the IRS changed withholding tables in February 2018, automatically adjusting take-home pay. All these moving pieces have made it hard for people to understand the TCJA impact on their individual situation. Relying on their refund size to determine what tax reform means to them may not only be misleading, but can also put them further at risk of not getting the tax outcome they want when they file next year.”

Watch our video explainer to learn more about tax reform, or read more here.

— Eric Revell

(Photo Credit: White House via Wikimedia / Public Domain)

(Video Credit: Elena Lacey for Countable)