GOP tax cuts aren't showing up yet in most paychecks
Saturday, March 31, 2018
Employers were supposed to have new withholding tables in place by mid-February to reflect the Tax Cuts and Jobs Act income tax rate changes.
Treasury Secretary Steven Mnuchin said once those payroll changes were in place, 90 percent of workers would see bigger paychecks thanks to the GOP tax bill.
Mnuchin might want to rethink his prediction.
A CNBC survey conducted March 17-20 of 800 Americans, 60 percent of whom were working, found that 52 percent of the employed haven't seen a change in their paychecks.
In fact, just 32 percent of the working adults that CNBC talked to said that they were taking home more money thanks to the tax cuts. This almost third of those polled seeing more money included 48 percent of Trump supporters and 35 percent of the middle class.
Of those who reported bringing home more money, 38 percent said the amount helps them a "great deal" or a "fair amount." Forty percent say the extra pay helps "some" or "just a little" and 22 percent report that the extra pay "does not help much at all."
As will all polls, there are a lot of numbers. After sorting through them, this week's By the Numbers figure is the more-than-half of CNBC survey respondents whose paychecks haven't noticeably changed.
Reasons for no relief: Of course, the timing of the poll could be a reason.
Although the Treasury encouraged companies or their outside payroll administrators to have the new withholding tax rates in place by Feb. 15, it's possible that date wasn't met. That would mean that when the survey was done, the new withholding amounts still weren't in effect.
Or it could mean that the workers surveyed aren't going to get that much of a tax break, at least in their paychecks, despite all the political posturing during the bill's hurried debate and passage late last year.
In early February, House Speaker Paul Ryan (R-Wisconsin) on Twitter cited a high school secretary's comments in an Associated Press article that she had already seen a $1.50-per-pay-period increase thanks to the new tax law.
Ryan caught a lot of flak for hyping the relatively small amount, but it seemed to align with at least one tax policy group's analysis of the TCJA.
The Urban-Brookings Tax Policy Center estimated that people with incomes between $48,600 and $86,100 will, on average, receive a tax cut of $930 for 2018, which is around $35 per pay period if divided equally among 26 pay periods. The Washington, D.C. based nonprofit calculated that people earning less than $25,000 will, on average, get a tax cut of only $60 over the course of the whole year.
Other polls, similar findings: Other polls also showed low return for taxpayers, at least early in the year, from the tax cuts.
A Politico–Morning Consult poll conducted in mid-February found that 37 percent of employed voters noticed more take-home pay, while 53 percent hadn't.
A poll conducted in late February for Bankrate found only 24 percent of workers saw an increase in their pay thanks to the new tax law. Forty-two percent said they didn't notice any difference in their paychecks.
Maybe more tax help later: It's also possible that the 2018 tax law changes could be more evident when folks file their returns next year and take advantage, for example, of the measure's larger child tax credit.
That, however, could be too late for Republicans, who rushed the tax bill into law last year, in part to use in their midterm election campaigns.
Have you noticed any change in your pay attributable to the TCJA?
Have you adjusted your withholding yet to account for the new tax rates and income brackets?
Will an increase in paycheck tax savings (or not) make any difference when you go to the polls on Nov. 6? Asking for some Republican friends.
You also might find these items of interest:
- 5 tax refund myths busted
- The pros and cons of tax refunds
- Most people pay more payroll tax than income taxes
You can follow this conversation by subscribing to the comment feed for this post.