Thread by @bencasselman

Most Americans -- regardless of income -- got a tax cut last year. Yet most Americans don't believe it. @jimtankersley and I explore why.
nytimes.com/2019/04/14/bus…

Why don't people believe they got a cut?
For one thing, the tax cuts were pretty small for most people. ~$780 on average per @TaxPolicyCenter. And they came over the course of the year, not in a lump sum, which made them harder to see.

(That $780 figure is for the middle quintile of earners. Overall average is more, but skewed by the top.)

Another factor: The IRS changed withholding tables so that most people got their cuts right away, but therefore didn't see a big increase in their refund. Many saw smaller refunds or none at all. nytimes.com/2019/03/21/bus…

Democrats were also very effective at branding this law as a giveaway to corporations and the rich -- in some cases including via false or misleading claims that a large share of middle-class families would get a tax increase (they didn't).

To be clear, pretty much every mainstream analysis agrees on two points:
1. Most Americans got a tax cut under TCJA;
2. The cuts disproportionately benefited corporations and the wealthy.

(It's also true that earlier versions of the bill *would* have raised taxes on a substantial share of middle-income earners. The final version of the bill largely resolved that problem, but that fact never really broke through.)

No surprise, there's a strong partisan component not just in support for the law but in whether people think they got a tax cut. Republicans mostly think they did; Democrats mostly think they didn't.

Then there's SALT: Politicians in blue states made a BIG deal of how the cap on the SALT deduction would hurt their residents. And it's true up to a point. But...

a) Many people who lost out because of SALT still got an overall tax cut (albeit a smaller one than if the deduction had stayed uncapped); and
b) Many people who think they lost out because of SALT were *never benefiting from the deduction in the first place.*

In some cases this is because people were taking the standard deduction. In other cases that's because they earned enough that they were getting hit by the AMT, which canceled out their SALT deductions.

To be clear, there ARE people whose taxes went up. It's notable that one such group is people with incomes in the low six-figures living in high-tax states (especially those without minor children) -- a group that includes many journalists.

Last point: I'm not arguing for (or against) the law. There are plenty of reasons you could oppose it even if you got a cut. It went mostly to corps/rich. It added to the deficit (it definitely did not "pay for itself"). There's little evidence so far of a boost to investment.

I just think it's notable that there's such a disconnect between what people believe about how the law affected them and what the evidence says really happened. <fin>
nytimes.com/2019/04/14/bus…