Why Are American Workers Barely Benefited from Trump’s Sweeping Tax Cut?

In the wake of the 2017 Tax Cuts and Jobs Act, many hoped that the sweeping changes would lead to a more equitable and prosperous economy, particularly for the middle class. However, reality has painted a different picture. Despite the reduction in tax rates, most American middle-class workers have seen little tangible benefit from the tax cuts. This article delves into why the tax reform has not significantly improved the financial outlook for many American workers.

The Intention Behind the Tax Cuts

The primary intention behind the sweeping Tax Cuts and Jobs Act was to stimulate economic growth, reduce corporate and individual tax rates, and provide a boost to the richest Americans and large corporations. The act was not designed to significantly aid the middle class in a sustained manner, as some of the benefits were skewed towards the highest earners and major corporations.

The Impact on Middle-Class Workers

For many middle-class Americans, the effects of the tax cuts have been minimal. According to an analysis, the average family with a pre-credit tax rate drop of 3% saw a tax savings of around $7,000. This might sound like a significant amount, but in the context of a middle-class budget, it often falls far short of what is needed to address issues such as rising costs in healthcare, education, and housing.

How the Tax Cut Affected Different Brackets

The changes in tax brackets and deductions have had varying impacts on different income levels:

0–9,525 (0–19,050 jointly): No change. This income bracket was already below the standard deduction, which was increased, thereby benefiting lower-income individuals more. 9,525–38,700 (19,050–77,400 jointly): A 3% decrease in the tax rate. 38,700–93,700 (77,400–156,150 jointly): A 3% decrease in the tax rate. 93,700–195,450 (156,150–237,950 jointly): A 4% decrease in the tax rate. 195,450–424,950 (237,950–424,950 jointly): A 1% decrease in the tax rate. 424,950–426,700 (424,950–480,050 jointly): No change in the tax rate. 426,700 and up (480,050 and up jointly): A 2.6% decrease in the tax rate.

These reductions, while beneficial, are often outweighed by other financial pressures faced by the middle class.

Escalating National Debt

The tax cuts have contributed to an escalating national debt, which is expected to be shared by future generations. This means that the burden of today's tax cuts may end up being a financial burden for those left in the middle class, potentially impacting their children and grandchildren.

Conclusion

While the 2017 Tax Cuts and Jobs Act aimed to boost the economy and provide financial relief, its primary beneficiaries have been the wealthy and large corporations. For many American workers, the impact of these tax cuts has been marginal, leading to an overall economic disparity. It's crucial for policymakers to consider measures that genuinely benefit the middle class and long-term stability rather than short-term tax breaks.

Stay informed and engaged in your economic rights and advocate for policies that ensure a fair and equitable distribution of benefits across all income levels.