/Not rich? Good news: You’re probably getting a tax cut. – POLITICO

Not rich? Good news: You’re probably getting a tax cut. – POLITICO

But Democrats have slashed taxes too, mostly in the form of stimulus checks and tax credits.

“It was a big honking tax cut for low- and moderate-income people,” said Howard Gleckman, a senior fellow at the Tax Policy Center.

“It plays against type — Democrats are not supposed to cut taxes, Democrats are supposed to raise taxes.”

Their tax cuts are temporary, though Democrats are now pushing to make many of them permanent. Combined with their proposed tax increases, that would make the U.S. tax system — already one of the most progressive in the world — even more so.

At a cost of $492 billion, Democrats’ tax cuts are among the largest one-year reductions ever approved by Congress (by comparison, the GOP’s 2017 package reduced taxes by $136 billion in the first year; their $1.5 trillion price tag was the cost over 10 years).

The cuts are a big reason why individual income taxes are now projected to plummet this year by one-third to $1.22 trillion, from $1.8 trillion.

Much of the tax cuts came in the form of stimulus checks, though Democrats also dramatically expanded the Child Tax Credit, beefed up a break for dependent care expenses and expanded the Earned Income Tax Credit. Unlike the 2017 cuts, all of those provisions were aimed at average Americans, with sharp income cutoffs.

A new JCT report examining how much people at different income levels will pay this year shows the net results.

Those earning between $30,000 and $40,0000 will owe nothing in income taxes and, thanks to refundable tax credits, get back an average of $3,500 per return — more than three times as much as JCT said in 2019, the last time it examined the issue.

Refundable credits allow people to receive checks for the difference when the break exceeds their tax bill.

The approximately 28 million returns reporting between $50,000 and $70,000 — on which people had collectively owed $41 billion in 2019 — this year will actually be paid $33 billion by the IRS. (Though people in that income group, on average, will pay nothing, results will vary within that cohort, with some people owing the IRS. Also, JCT examined rates by returns filed, rather than by individuals or households.).

High earners, excluded from Democrats’ tax cuts, would see their average tax burdens essentially unchanged from 2019. Those making between $500,000 and $1 million will pay 20.8 percent of their earnings in income taxes. People earning more than $1 million will pay 25.8 percent.