Yesterday, the Associated Press put out a so-called “fact check” of President Trump, Speaker Ryan, and Ways and Means Chairman Kevin Brady’s Tax Day comments that next year will bring a simpler tax filing process for taxpayers under the new tax code.
Will filing taxes be simpler for Americans?
AP says “not so.”
Here are the FACTS:
DOUBLED STANDARD DEDUCTION:
According to the CBO, next year 31.3 million hardworking Americans will no longer be burdened with the complicated process of itemizing deductions on their taxes:
- Under the old, bad code in 2017, 48.8 million taxpayers itemized.
- Under the new code only 17.5 million taxpayers will itemize.
That’s a 64% reduction in the number of itemizers.
The AP piece pays lip service to the doubled standard deduction, but strangely doesn’t connect the fact that not having to itemize vastly simplifies the filing process. The whole piece rests on the fact that it takes no additional time to fill out a form itemizing deductions than it does to fill out a form just taking the standard deduction, which is simply false.
If you’ve ever itemized, you know how long it takes—a heck of a lot longer than taking the standard deduction–which is now doubled thanks to the Tax Cuts and Jobs Act. This greatly reduces the number of people who will itemize, and reduces the amount of time it takes to do taxes.
MINIMIZED ALTERNATIVE MINIMUM TAX
Also according to the CBO, 4.8 million hardworking Americans will no longer be hit by the Alternative Minimum Tax (AMT), an onerous additional tax that forces millions of taxpayers to calculate their taxes twice, and was all but eliminated in the Tax Cuts and Jobs Act:
- Under the old, bad code, in 2017, 5 million taxpayers were hit by the AMT.
- Under the new code, just 222,000 taxpayers will be hit by the AMT.
That’s a 96% reduction in the number of Americans hit by the AMT.
As you can imagine, filling out forms that subject your income to additional tax under the AMT takes a lot of time, effort, and—you guessed it—accountants and lawyers.
Under the old, bad code, according to the Tax Foundation, people spent 2.6 billion hours complying with individual tax returns annually, which adds up to a whopping $98.6 billion dollars of compliance cost. The good news is those bad, old days are gone. We can’t wait for hardworking Americans to experience the relief that next year will bring under the new, simpler, pro-growth tax code.
BOTTOM LINE: We rate the AP “fact check”: You got it wrong.