A tax cut or a tax increase? The chart that tells 25,000 stories

Would the tax bill help or hurt? It’s a mixed bag. Click to see the Times analysis.

As the Republican tax bill process comes to a head this week, you’re sure to hear a Tower of Babble about what it is — a middle-class tax cut, a middle-class tax increase, a deficit exploder. Fortunately, there’s data to help us out. Here’s an amazing story and analysis by The New York Times that every American should read and digest, right now.

In taxes, perhaps more than any other federal policy, there is an enormous Blind Men and the Elephant problem. Most people can only “see” the part of the tax cut that touches them.  If you pay a lot in local property taxes, you probably hate what you’ve heard. If you have children, you might like it.

While those split reactions are understandable, that’s no way to run a country. It’s not even a great way to act in your own self-interest, as some elements of the tax plan might help you personally, while others might hurt you.  Putting it all together, and then putting it into some kind of national context, is pretty impossible.

Unless you use data visualization. That’s what the Times did.  And here, you see a pretty fair representation of what the current Senate plan would accomplish (noting, of course, that the GOP tax plan is still very much subject to change).

As I’ve written earlier, tax bills — like all budgets — tend to be a way of picking winners and losers.  At your office, your company has probably decided recently to cap spending or lay off workers in some departments so it can grow other departments. That’s essentially what Uncle Sam would do with tax changes.  So, homeowners in New Jersey would probably get an ugly federal tax bill with the Senate plan; young families with kids who rent might do well.

That’s how you get warring anecdotes on cable news channels.

The Times moves away from that kind of useless debate by examining 25,000 typical middle-class scenarios all at once.  Here’s the obvious conclusion: Many singles and families who never itemize their federal taxes would probably benefit, thanks to the a increase in the standard deduction. On the other hand, nearly half of those who take deductions would do worse, and some a lot worse.

What’s critical from the Times analysis is this: While Republicans admit that not everyone in the middle class would see a tax cut, they often make it sound like that would be rare. In reality, millions of middle-class Americans would pay more under the Senate plan.  Perhaps a majority of Americans would pay less, but about 40 percent of those who itemize their taxes would pay more, the Times analysis found. And that’s in year 1. As time passes, the tax cuts shrink, and the tax increases rise, for most groups.

Also critical: the impact of the tax bill is all over the map.  A young married couple who earn $103,800 with two children would owe $2,790 less next year. But another couple who earn $83,000 with one child would owe $1,220 more. A middle-age married couple with no children who earn $69,200 would owe $2,510 more. A middle-age single with one child 67800 would owe $1,960 less. And so it goes.

The chart is mesmerizing, and it’s a fantastic contribution to what is sure to become a meaningless war of words over tax “cuts” this week.  You owe it to yourself to play around with it for a few minutes today.

Here’s another link to the story and interactive data chart.

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About Bob Sullivan 1445 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.


  1. The one thing that no one has mentioned is the deductions for those over 65 or blind if we lose out. $27100 old way as opposed to 24000 the new way, means a loss in deductions of 3100.

  2. I rent out a couple of properties. To keep the properties looking good, I itemize my expenses. I won’t be able to do that if the new tax laws go into effect because I am a person and NOT a corporation.
    This will put a lot of Mom and Pop landlords out of business. It’s either convert to a business model (Corp or LLC or Trust) or loose all deductions! How is this fair? Am I wrong? Am I safe? Can I still take off expenses for income property? If the dishwasher breaks and I have to repair it, can I deduct it as usual or are all the deductions gone?
    I’ve asked around, but no one knows what happens to us little land owners who itemize and deduct the costs of doing business.

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