By Concerned Citizens of Western Nebraska
In a recent blog, Congressman Adrian Smith recently highlighted the supposed success of the Tax Cuts Jobs Act of 2017(TCJA) and encourages the extension of this legislation as labeled as “Pro-Growth Policies for All Americans.” A closer examination of the facts reveals he remains out of touch with the realities regarding the taxpayers he represents in the 3rd district of Nebraska.
1.“If Congress fails to complete our work and TCJA provisions are allowed to expire, individuals making less than $400,000 per year would face a net tax increase exceeding $2 trillion… the largest tax hike in American history.”
It is true that many TCJA provisions are set to expire in 2025, and if not extended, taxes could rise for individuals across income brackets. However, the $2 trillion figure is cumulative and reflects total tax increases over 10 years, not an annual increase. The “largest tax hike” framing is ignoring that this would be a reversion to pre-TCJA rates, not a new tax imposition. The threshold of “$400,000” is a Biden administration benchmark for avoiding tax increases, but this line isn’t universally applied in tax law. Nebraska’s average household income is approximately $119,000. Only 3% of Nebraska households earn $400,000.
2. “The bill permanently preserves lower individual income tax rates, the doubled standard deduction, and the doubled child tax credit.”
The Tax Cuts Job Act of 2017 did double the standard deduction and child tax credit. However, it also eliminated personal exemptions, capped state and local tax (SALT) deductions, and increased deficits. These tradeoffs offset or even reduced benefits for many residing in high-tax states or those with larger families.
3. “The increased death tax exemption will continue to help hard-working family farmers, ranchers, and small businesses…”
The estate tax exemption was increased dramatically under the Tax Cuts Job Act (to over $12 million per individual). The vast majority of family farms and small businesses do not pay estate tax. In reality, less than 0.2% of estates are affected. This talking point is often used rhetorically but has minimal real-world impact for average farmers or small businesses—the majority of residents in Nebraska’s 3rd district.
4. “The proportion of the tax burden falling on upper-income Americans grew…”
The top 1% did pay a larger share of total federal income taxes post-TCJA, but that’s because: 1) They earned more income. 2) Their absolute tax payments decreased even while their share rose. 3) They took advantage of tax shelters to hide income from being taxed. The Tax Cuts Job Act enabled inequality to increase, with the top earners benefiting disproportionately to those in the lower tax brackets.
5. “TCJA brought in record federal revenue, exceeding projections made by the Congressional Budget Office for 2021 and 2022.”
Total federal revenue did increase, but this was largely due to post-pandemic economic rebound and inflation, not just Tax Cuts Job Act. The Congressional Budget Office and multiple independent analyses found that TCJA reduced revenue relative to what it would have been without the law. In reality, the federal deficit increased, and corporate tax revenues dropped significantly after the Tax Cuts Job Act.
6. “Repealing the 1099-K reporting requirement… ‘Babysitter Tax’”
The $600 threshold for 1099-K reporting was introduced to increase transparency and reduce tax evasion in the gig economy. This affects business income, not babysitting or casual payments unless they cross that threshold. IRS implementation has indeed been delayed due to pushback and complexity, but calling it a “Babysitter Tax” is rhetorical
7. “Ending the unauthorized IRS Direct File program.”
The IRS Direct File program is a pilot initiative allowing taxpayers to file taxes directly with the IRS for free. Calling it “unauthorized” ignores that it was funded by Congress in the Inflation Reduction Act. The opposition is driven by private tax software lobbyists, not taxpayer demand.
8. “Educational Choice for Children Act… empower parents”
This act would provide federal tax credits for private school tuition, funneling public money to private institutions and undermining public education.
Originally posted to ChadronRadio.com
