Shortly after his election to the presidency, Trump signed a Republican-backed tax bill in 2017. The Tax Cuts and Jobs Act was lauded as the answer to the financial crisis of middle-class Americans. What has this meant for Black Americans?
On the surface, the Tax Cuts and Jobs Act reduced the tax rates for almost all tax brackets. It also increased the standard deduction and raised the child tax credit by $500. With everything laid out to appeal to Black middle-class Americans, how is this act detrimental?
Most of the tax breaks benefitted corporations and wealthy individuals over the middle class. Some of those breaks are ending this year, but most of them are set to expire in time for the 2025 filing season. The end of tax breaks will lead to a 1–4% increase in federal income taxes, an increase that is even higher than before the act went into effect.
There is the possibility that this year, some filers will see returns up to 10% higher due to inflation adjustments on earned income and their corresponding tax brackets last year. However, these may be some of the final significant returns to come back to Black households. The tax breaks primarily benefit the exceptionally wealthy and are paid for by the middle and lower classes.
The 2023 tax filing season officially began on Jan. 29. Though returns this year may be higher than in previous years, this will likely be the last windfall for Black families. When the 2017 tax cuts expire, Black filers will be stuck with a bigger tax bill.