A funny thing happened when Congress approved a tax cut for the middle class eight years ago: Most Americans didn’t notice.
The 2009 economic-stimulus bill contained a one-year tax break worth $800 for married couples in 95 percent of working households -- a little over $15 a week. A February 2010 poll found that just 12 percent said their taxes had been reduced. More than half, 53 percent, said they saw no change. A remarkable 24 percent thought their taxes had increased.
“Virtually nobody believed they got a tax cut,” said Jared Bernstein, an economist who worked in former President Barack Obama’s White House. He called it a source of frustration at the time.
That 2009 tax cut contains warning signs for President Donald Trump and congressional Republicans. Their tax plans would deliver about the same level of initial relief to households with incomes between $40,000 and $100,000 -- roughly $800 on average -- according to data from Congress’s Joint Committee on Taxation. If those numbers hold, and if history’s any guide, Trump’s working-class voters may not feel the tax cut he has repeatedly promised them.
The numbers are a little more generous in an independent analysis of the Senate bill published last week; it found that the plan would raise average after-tax incomes by $1,200 per household in 2019. But that report by the Urban-Brookings Tax Policy Center found that more benefits go to higher earners, affecting the average. Regardless, that’s just over $23 a week.
“The changes are going to be too small for people to recognize,” said Bernstein, now a senior fellow at the liberal Center on Budget and Policy Priorities. “Most families won’t see anything from the plan until they file their 2018 taxes in April 2019.”
‘Trump Economy’
White House spokeswoman Lindsay Walters dismissed fears that voters won’t perceive gains. She said in a statement that 2018 “will see a booming Trump economy that’s creating jobs, raising wages, and adding retirement security” due to a mix of tax cuts and fewer regulations.
Timing is critical, in political terms. Congressional midterm elections are less than 11 months away -- magnifying the importance of the tax legislation’s short-term effects. Democrats will be seeking to wrest control of Congress from Republicans, who may have little to show beyond the tax bill they’re rushing to pass before the end of this year.
Many GOP lawmakers -- and conservative advocacy groups -- have cited the political importance of securing a tax bill this year. As Obama did with his stimulus tax cut, House Majority Leader Kevin McCarthy of California urged Americans to pay attention to their paychecks.