Tax cuts for every group except the richest

See A Preliminary Look at 2018 Tax Data by Nicole Kaeding of The Tax Foundation. Excerpt:

"At the end of June, the Internal Revenue Service released the first set of tax return data from 2018. These are the first numbers on the effects of the Tax Cuts and Jobs Act (TCJA), which was passed in December of 2017. The preliminary data provides aggregate information by income group on a range of topics, including sources of income as well as deductions and credits taken by taxpayers.

It is important to note that this new information does not contain data from those who requested a filing extension. For this reason, it includes only about 80 percent of total income tax liability for the year 2018.

Overall, the data seems to match expectations about changes. Let’s look at the highlights.

Tax Liability

Critics of the TCJA have claimed that the law’s tax cuts only benefit high-income individuals and businesses. However, the visual below shows that total tax liability fell for all income groups except those earning over $1 million in 2018.

Importantly, these numbers show total tax liability. While taxpayers in every income group (except for those earning more than $1 million) saw a tax cut on average, individual circumstances vary.

Filing Methods

One of the most significant changes introduced by the TCJA was the expansion of the standard deduction. The standard deduction increased from $6,500 to $12,000 for single filers, and from $13,000 to $24,000 for those married filing jointly, in 2018.

This change had a significant impact on the ease of filing for many taxpayers, as taking the standard deduction simplifies the tax filing process. As shown below, the percent of taxpayers who itemized went down at all income levels. Overall, the percentage of the population that itemizes decreased from 30 percent to 10 percent."