Heritage Foundation: Average Household in Every State Will Get a Tax Cut in 2018

Heritage Foundation: Average Household in Every State Will Get a Tax Cut in 2018


A new analysis by the conservative Heritage Foundation says that the average household in every state and every congressional district will get a tax cut this year as a result of the GOP tax law. You can find more details for your state or congressional district here, but these are the key details from the study:

  • Taxpayers will save an average of $1,400 this year, and married couples with two children will save $2,917.
  • The Heritage model says that, including the economic feedback of the new tax law, the average household will see more than $26,000 in additional take-home pay, or $44,697 for a family of four, over the next 10 years.
  • The analysis finds that 89 percent of Americans will see either a tax cut or no change in 2018. (Basic arithmetic suggests that means that 11 percent will pay more.)
  • The average tax cut varies widely across congressional districts, from $395 in New York’s 15th district (in the Bronx) to $3,332 in California’s 18th district, in the San Francisco Bay Area.
  • On a percentage basis, the tax cuts “benefit lower-income districts more than districts with larger incomes in bigger population centers,” the report says.
  • "These benefits could be even greater if the tax law is made permanent and could disappear if the tax cuts are repealed," the Heritage researchers write.

Why it matters: The basic findings are roughly in line with an earlier analysis by the nonpartisan Tax Policy Center, which found that the Republican tax law would cut taxes by about $1,600 on average in 2018, with 80 percent of households getting a smaller tax bill and about 5 percent paying more. “Most households would get a tax cut at first, with the biggest benefits going to those with the highest incomes,” the Tax Policy Center said. “After 2025, when nearly all of the bill’s individual income tax provisions are due to expire, only high-income people would get a meaningful tax cut.”

But Heritage’s use of averages works to obscure some of the distributional details — the nitty-gritty of just who will benefit, and how much. And it doesn’t address an argument that many analysts have made: that the tax cuts aren’t free, and will eventually have to be paid for through tax hikes or spending reductions.

The bottom line: The new report, with its focus on congressional districts, seems designed to arm Republicans with fresh numbers they can use to tout the tax cuts as they return home for their August recess and in the months leading up to the midterm elections.