As the US tax filing deadline looms, social media users are resurfacing a claim that former president Donald Trump signed legislation raising the burden on those earning less than $75,000 annually. This claim, however, is misleading. The posts reference an independent assessment that weighed the law’s effects on health care-related credits, which experts say is not the same as a tax hike.
Trump signed the Tax Cuts and Jobs Act (TCJA) in December 2017, kickstarting dramatic reductions for corporations and temporary discounts for individuals. The legislation does not explicitly raise taxes for Americans with annual salaries less than $75,000. “The Trump cuts on average lowered taxes for most households, including on average those earning less than $75,000,” said Eric Toder, a fellow at the Urban-Brookings Tax Policy Center at the Urban Institute.
The claims shared online appear to stem from a Joint Committee on Taxation (JCT) report published in December 2017. The nonpartisan congressional research committee estimated that, starting in 2021, Americans in several income categories below $75,000 would start to see their federal taxes increase. However, this is due to a TCJA provision that eliminated a tax penalty for Americans who do not maintain a minimum level of health insurance coverage under the Affordable Care Act (ACA).
William McBride, vice president of federal tax policy at the nonprofit Tax Foundation, stated that the online claims are “not accurate or representative of how the 2017 Tax Cuts and Jobs Act works.” The JCT report accounts for the ACA policy changes, which is not consistent with other analyses that isolate the effects of the TCJA.
Using estimates from the JCT, the Congressional Budget Office reported in 2017 that the law would actually reduce taxes on average for all income groups through 2025, when the legislation is set to expire. Both the Tax Foundation and the Tax Policy Center reached similar conclusions.
It’s important to note that if the cuts expire, Americans making less than $75,000 annually “will see their taxes go up.” However, both Biden and Trump have expressed intentions to prevent this from happening. Biden has said he won’t raise taxes on people making less than $400,000 and Trump has talked about extending the 2017 tax cuts.
As we approach the tax filing deadline, it’s crucial to separate fact from fiction. Misconceptions can lead to unnecessary panic and confusion. Always rely on trusted sources for your tax information and consult with a tax professional if you’re unsure.
{Article Source: https://factcheck.afp.com/doc.afp.com.34LE3NU}