Sunday, October 11, 2020
Marketplace, Fact-Checking Harris’ and Pence’s Claims About Taxes:
At the vice presidential debate on Wednesday, Sen. Kamala Harris and Vice President Mike Pence sparred over who the Trump administration’s tax reforms wound up benefiting: middle-class families or the rich.
Soon after he entered office, President Trump signed the Tax Cuts and Jobs Act into law, which lowered the corporate tax rate from 35% to 21% and changed the income level of individual tax brackets, dropping the highest tax bracket from 39.6% to 37%.
The winners of Trump’s tax law
Harris said that Donald Trump’s tax law benefited “the top 1% and the biggest corporations,” while Pence said that the average American family of four saved $2,000 in taxes because of the new law.
According to the White House’s Council of Economic Advisers, a typical family of four earning $73,000 received a $2,000 tax break in 2018.
According to Eleanor Wilking, an assistant law professor at Cornell University, because the tax law reduced personal income rates for every tax bracket except for the 10% bracket, it did not exclusively benefit those in the top 1%. She pointed out that it did disproportionately benefit high-income taxpayers.
Wilking noted that multiple studies showed the bottom 20% of the income distribution experiencing a 0.3-0.5% increase in after-tax income, while the top 20% of the income distribution had their taxes reduced by between 2.8% and 3.1%.