By Rick Kahler via Iris.xyz
The Tax Cut and Jobs Act (TCJA) has generated a lot of media hype, much of which is coming from the extreme wings of both political parties and much of which is simply not true. Here is some perspective.
First, when he signed the bill President Trump called it “the largest tax cuts in our history”. This is not so.
According to a November 2, 2017, article in Reuters, the largest personal tax cuts in U.S. history came from Presidents Warren Harding and Calvin Coolidge, both Republicans. In 1922, the top tax rate was 73 percent. By 1925, it was only 25 percent.
Under Presidents John Kennedy and Lyndon Johnson, both Democrats, the tax cuts of 1964 and 1965 cut the top rate from 91 percent to 70 percent. The 1986 Reagan cuts lowered the top rate from 70 percent to 28 percent.
In comparison, the Trump cuts reduced the top rate from 39.6% to 37%, a miniscule 6.6% drop.
The new tax rules do mean some significant changes. The good news is that the standard deduction will nearly double and the maximum child tax credit will increase from $1000 to $2000.
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