Hudson Supports Tax Cuts for Low, Middle Income Americans

WASHINGTON, D.C. - Today U.S. Representative Richard Hudson (NC-08) released the following statement on the Tax Cuts and Jobs Act (H.R. 1) which will deliver the largest percentage reductions in taxes paid for low- and middle-income Americans:

The Joint Committee on Taxation (JCT) recently released distributional tables to show the impact of the Tax Cuts and Jobs Act (TCJA) on taxpayers across the income distribution. JCT’s distributional tables reflect static snapshots of selected income groups in 2019, 2021, 2023, 2025, and 2027. For each income group in each year, JCT calculates the projected amount of taxes paid under current law – and under the TCJA. The tables also show average tax rates under current law and under TCJA for each income group. The analysis shows the Tax Cuts and Jobs Act delivers the largest percentage reductions in taxes paid for low- and middle-income Americans.

On a percent basis, low- and middle-income Americans will see the largest reductions in taxes paid under the TCJA. For example, earners in $50,000 to $75,000 range, which is the middle of the income distribution, would see a 7.9 percent reduction in taxes paid -- whereas earners in the $500,000 to $1 million range would see a 4.3 percent reduction in taxes paid.

Consider the following example from the House Ways and Means Committee. Under current law in 2017, a married couple with two kids earning $59,000 (which is the national median income) owes $1,582 in income taxes. Under the TCJA that family will only owe $400 because the plan would cut their taxes by $1,182 – a whopping 75 percent reduction in taxes paid.

Likewise, if that same family earned $300,000 they would pay $64,680 under current law and pay $58,600 under TCJA – a tax cut of $6,080. Although that’s a bigger tax cut in dollar terms, their percentage reduction in tax liability is 9 percent.