Since its enactment in 2017, the Tax Cuts and Jobs Act (TCJA) has been a subject of debate, with critics arguing it favored the wealthy. However, a recent study by The Heartland Institute suggests otherwise. The study indicates that working-class Americans benefited most from the tax cuts.
The Heartland Institute's analysis utilized IRS data from 2017 to 2022. It found that lower- and middle-income Americans experienced significant reductions in their effective income tax rates compared to higher-income earners. "The TCJA delivered the largest tax rate cuts to working-class Americans and made the tax code more progressive by increasing the share of income taxes paid by the wealthy," said Justin Haskins, Senior Fellow at The Heartland Institute.
The updated study provides further evidence supporting initial findings from a 2021 report. It shows that between 2019 and 2022, lower- and middle-income filers continued to see greater tax rate cuts while wealthier individuals bore a larger share of the overall tax burden.
Christopher Talgo, Editorial Director at The Heartland Institute, emphasized that "the TCJA has been a boon to hardworking Americans." He noted that households on the lower end of the income spectrum received substantial percentage cuts and now pay less of the total tax burden.
Despite criticism suggesting otherwise, Jack McPherrin, Research Fellow at The Heartland Institute, highlighted that "lower- and middle-income households have received the largest tax cuts as a percentage of income."
As Congress considers whether to extend these provisions beyond their current expiration date at the end of 2025, this study provides critical insights into who truly benefits from these tax policies.
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