Fact-checking Trump’s claim about his tax legislation
Trump several times tonight — and many, many, many times before — has claimed the tax legislation passed during his presidency was the largest tax cut ever.
False. Trump has repeated this statement often. When it was passed, Trump’s tax cut was, in inflation-adjusted dollars, the fourth-largest since 1940. And as a percentage of GDP, it ranked seventh.
He also said, “People don't realize I brought taxes way down, way way down, and yet, we took in more revenues the following year than we did when the tax rate was much higher.”
That’s technically true, but misleading.
If you look at when the tax bill passed, it’s not clear at all that an increase in tax receipts followed the bill’s passage. Every year, the U.S. population grows, and — except during a recession — the size of the economy grows, too. "So you’d expect receipts to be higher every year, all other things equal," said Benjamin R. Page, a senior fellow at the Urban Institute-Brookings Institution Tax Policy Center, told PolitiFact previously.
If you look at when the tax bill passed, it’s not clear at all that an increase in tax receipts followed the bill’s passage. For the three months of fiscal 2018 prior to the tax cut, individual income tax collections rose by 10.8% over the equivalent period from 2017. But the rise for the seven months after the tax cut was 6.7%.
And if you look at total tax collections from every category, rather than just individual income taxes, the picture is even worse. During the seven-month period after the tax bill passed, total receipts actually fell slightly compared to the equivalent period in 2017, by about a tenth of a percentage point.
Perhaps the most revealing comparison takes into account the May-to-July period, because it excludes the spike in payments in April, when most Americans pay taxes on income generated in 2017, before the tax law was passed. During that period, individual income tax collections fell by about 1% compared to 2017.
—PolitiFact’s Louis Jacobson and Aaron Sharockman