Home
/
RELIGION & LIBERTY ONLINE
/
3 Reasons income tax cuts (almost) always benefit the wealthy
3 Reasons income tax cuts (almost) always benefit the wealthy
Feb 11, 2026 8:47 AM

Death and taxes may be the only certainties in life, but there is a close third: e tax cuts mostly benefit e workers.

As Congress discusses tax reform, the debate about who will benefit from tax cuts is back in the news. And many people are concerned with how the changes will favor high e earners. Even President Trump has promised that the reforms won’t give wealthy Americans a massive tax cut.

The reality is that there is almost no way to cut e taxes without most of the benefits going to e workers. Here are three reasons why:

1. Americans with high es pay most of the taxes

The intended goal of reducing taxes on Americans can have a significant affect on whose taxes are being cut. For example, let’s say the goal is to cut e taxes to return a specific amount of money back to citizens—$500 billion—in the hopes of stimulating consumer spending.

If that is our goal, then we can’t cut the e taxes paid by the bottom 45 percent of American earners. Why? Because they already don’t pay any e taxes.

As Politico notes, the top 0.1 percent of earners are projected to pay more to the IRS than the bottom 80 bined. And for 2017, official government data shows the top 20 percent will pay 95 percent of all e taxes. The rich benefit from e tax cutsbecause they pay most of the e taxes.

2. Americans with lower es already have low tax rates

But what if instead of focusing on a dollar amount, we just cut e tax rates? Couldn’t we just cut the rates on the lower rungs of the e ladder? Not really, because they are already low.

The average federal tax rate for people whose earnings put them in the 21st to 80th percentile of es has fallen by 30 percent since 1979 to 13.8 percent. Rates on e people have declined even further, by 57 percent, to 3.3 percent. If we cut the lowest rate by 1 percent it might save a worker $100 a year.

“The fact that they don’t pay very much in taxes means that it’s very hard to provide them with a large tax cut,” says Adam Looney, a former deputy assistant Treasury secretary for tax analysis in the Obama administration.

3. Marginal tax cuts benefit everyone

e taxes are based on marginal rates, the amount of tax paid on an additional dollar of e. Here’s an example of a marginal tax rate bracket.

10% for e $0 to $9,275

15% for e $9,275 to $37,650

25% for e $37,650 to $91,150

28% for e $91,150 to $190,150

33% for e $190,150 to $413,350

35% for e $413,350 to $415,050

39.6% for e $415,050+

Let’s say we want to lower the taxes for everyone making $90,000 or less, so we reduce the 25 percent bracket to 20 percent, the 15 to 10 percent and the 10 to 7. (For the sake of simplicity, we’ll assume there are no deductions, including no standard deduction.)

The effect would be that someone making $9,000 a year would pay $270 less in taxes, someone making $35,000 would pay $1,750 less, and someone earning $50,000 a year would pay $2,500 less.

But the person making $100,000 would also save about $20,390 because of the lower marginal rates. The worker making $9,000 saw her taxes reduced by 3 percent but the person making $100,000 had a more than 20 percent reduction.

“It’s basically impossible to have a large tax cut that doesn’t involve most of the benefits going to e groups just because that’s who pays taxes now,” says Looney.

The real questions Americans—especially American Christians—should be asking is, “Why does it matter?” Why are we so worried that the wealthy may be getting some sort of advantage that is out of proportion to what we may be getting? Perhaps we should be less concerned on sinful class envy and more focused on developing prudent tax policies that benefit everyone and lead to greater economic flourishing.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Anthony Bradley on Sustainability and Stewardship
At Acton University last week, Anthony Bradley gave a lecture titled, “Beyond the Sustainability Complex.” In his lecture, he explored Christian stewardship and addressed some mon fallacies about sustainability. Bradley began with this statement: “Being less bad is not good stewardship.” As Christians, we are not called to damage the environment less than our neighbor, but we are called to do good. The main way that we attempt to be “less bad” is through recycling. Bradley spoke at length about...
Bavinck on Marriage and Cultural Reformation
The Dutch Reformed theologian Herman Bavinck has some wise words for reform of cultural institutions, notably marriage and family, in his exploration of The Christian Family: All good, enduring reformation begins with ourselves and takes its starting point in one’s own heart and life. If family life is indeed being threatened from all sides today, then there is nothing better for each person to be doing than immediately to begin reforming within one’s own circle and begin to rebuff with...
Man of Steel, Man of Sorrows
Last time the Superman franchise was rebooted, I reacted pretty negatively to the messiah-lite qualities of Clark Kent’s alter ego. In this fine piece over at Big Think, Peter Lawler analyzes the nature of this tension in the context of the new film quite aptly: The film also has all kinds of Christian New-Agey imagery that you can grab onto if you’re not much of a reader. Superman pared in some ways to Jesus; he begins his mission at age...
When It Comes To Messaging, The Left Gets It (And We Don’t)
The passage of Obamacare in 2010 remains one of the most contentious legislative battles in recent memory. It was such an “attractive” bill that in order to garner the final few votes needed for its victory President Obama had to promise certain senators that their states would be exempt from its regulatory measures. It was unpopular when it passed. It’s unpopular today. But members of the progressive-Left in this country possess two specific qualities that enable them to move forward...
Community, Dignity, and Restoration Through Entrepreneurship
Last month, I had the pleasure of interviewing the folks at Neighborhood Film Company, pany that melds for-profit with non-profit to train, mentor, and employ adults in recovery through the process of filmmaking. This week, Tim Høiland has an article for Christianity Today’s This is Our City project that expands on NFCo.’s story, digging deeper into the ins and outs of their business model and further exploring the dynamics of munity-oriented approach. Though big can sometimes be better, the founders...
Commentary: Can America Remain the Land of Religious Liberty?
There is little doubt that America is moving further away from the kind of broad and liberal religious freedom that was championed during the founding period. In terms of intellectual thought, that period was certainly the high water mark for religious liberty around the globe. As Americans celebrate their freedoms and Independence next week, I seek to answer the question in this mentary about America’s ability to remain the land of religious liberty. Sadly, the outlook is rather bleak, and...
Video: Samuel Gregg Closes Acton University 2013
Acton’s Director of Research Samuel Gregg took to the podium on the final night of Acton University 2013 to deliver the closing plenary address for the conference. Below, Gregg closes the conference with a reflection on modern threats to religious liberty, and how the faithful can respond. ...
Acton University on Ancient Faith Radio
The audio of four lectures from Acton University last week focusing on topics related to the Orthodox Christian Tradition — two by Fr. Michael Butler, one by Fr. Gregory Jensen, and one by Fr. Hans Jacobse — is now available to stream free of charge on Ancient Faith Radio (here). The lectures are as follows (click to listen): Fr. Michael Butler, “Orthodoxy, Church, and State” Fr. Michael Butler, “Orthodoxy and Natural Law”Fr. Gregory Jensen, “East Meets West: Consumerism and Asceticism”Fr....
Perfect Equality and Extreme Despotism
From Main Currents of Marxism by Leszek Kolakowski (1927-2009): KolakowskiMarx took over the romantic ideal of social unity, and Communism realized it in the only way feasible in an industrial society, namely, by a despotic system of government. The origin of this dream is to be found in the idealized image of the Greek city-state popularized by Winckelmann and others in the eighteenth century and subsequently taken up by German philosophers. Marx seems to have imagined that once capitalists were...
What India’s $800 Heart Surgery Can Teach Us About Healthcare in the U.S.
India’s best-known heart surgeon was interrupted during surgery to make a house call. “’I don’t make home visits,’ ” said Devi Shetty, “and the caller said, ‘If you see this patient, the experience may transform your life.’ ” The request came from Mother Teresa, and the experience did change his life. Shetty’s most famous patient inspired the cardiac surgeon and healthcare entrepreneur to create a hospital to deliver care based on need, not wealth. In 2001, Shetty – who the Wall Street...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved