The Middle Class Doesn't Need More Tax Relief
Between credits and deductions, it is not hard to produce a return that will result in an effective rate of less than 10%.
Many Americans don’t need tax relief.
Photographer: Joe Raedle/Getty Images
President Donald Trump recently indicated that he would push for a middle-class tax cut sometime before the elections in November. The Tax Reform Act of 2017 did lower marginal rates a bit, but it wasn’t a true middle-class tax cut. Rather, it was mostly a cut for companies that brought corporate income taxes down from among the highest in the world to average levels. But it’s worth asking whether the middle class really needs tax relief?
It is hard to make the argument that people in this stratum are overtaxed. While we don’t know what the Trump administration is proposing, the speculation is that the 22% marginal rate, which currently covers incomes between $80,250 and $171,250 for married taxpayers filing jointly, will be lowered to 15%. The marginal rate below that, which covers incomes up to $80,250, is 12%. Things changed a bit with the introduction of the $24,000 standard deduction, but households in these tax brackets have not had much in the way of true tax liability. Between credits and deductions, it is not hard to produce a tax return that will offer a filer an effective rate of below 10%. Middle class tax rates are not especially high.