The tax reforms passed by Congress last year have now been in effect for three full months. Are the promises of bigger paychecks and benefits happening? A poll by CNBC says they are not.
• Just 32% of those polled say their paychecks are larger than before the cuts
• Of the 32%, 38% thought the amount their wages went up helped a great deal
• That leaves just 12% who thought the plan helped in any major significant way
To be fair, just 60% of those taking the CNBC poll are employed.
The CNBC poll isn’t the only one to come to that conclusion. A poll done in mid-February by Politico–Morning Consult said just 37% noticed more money while 53% did not.
Political pundits say the apparent unhappiness of the other 68% could bode badly for Republicans running for office in the mid-term elections in November. That reason — they say — is because Republicans made the reform promises of more money in our pockets an election centerpiece.
Vanessa Williamson of the Urban-Brookings Tax Policy Center says one reason people are not noticing big changes is because they are spread out over a year. Those with incomes between $48,600 and $86,100 see about $35 per two-week pay period. While not a huge amount, spread it out to a year and it’s about $930.
She said those with incomes below $25,000 will see just $60 over a year. In other words, “The tax bill just doesn’t provide much benefit to most people,” she said.
The survey also shows what many critics of the reforms said in the beginning. People with higher incomes will notice the take-home pay increase more than individuals with lower incomes.
Another reason — says House Ways and Means Committee Chairman Rep. Kevin Brady spokeswoman Julia Slingsby — is some credits like the larger child tax credit are not reflected in the current withholding tables.
“There are benefits of tax reform that aren’t necessarily reflected in the new withholding tables, and this is the last year Americans will have to file their taxes under the old code,” she said.
Here’s another fact that needs to be noted in the CNBC survey:
• 48% of Trump voters said they are seeing more take home pay
• Just 22% of Hilary Clinton voters said they are seeing more take home pay
As for wage increases as a result of the tax reforms:
• 62% of Trump voters said they saw a bump
• 35% of Clinton voters did not
One last comment on the 60% of the CNBC responders that are employed. Of them, 41% say they expect wages to rise next year by a moderately high level.
Mark Penn — who worked on the CNBC poll and who is a former strategist for President Bill Clinton — said, “People are always skeptical about their getting higher pay and tax or other benefits. The key point is how are they feeling about the overall economy. A party should never run on tax cuts but on economic performance, employment and wage gains. Tax cuts by themselves would not be a winning message.”
Source link: The Hill