President Joe Biden gave his State of the Union address Tuesday night and made a number of misleading and false claims. Here’s a breakdown of what was wrong:
Biden claimed in his speech that the tax cut passed under President Donald Trump was geared towards helping only the wealthiest Americans. “Unlike the $2 trillion tax cut passed in the previous administration that benefitted the top 1 percent of Americans, the American Rescue Plan helped working people and left no one behind,” he said.
While the top 1 percent of Americans did benefit from the tax cuts, Biden errs in suggesting that working class Americans were left out of those benefits. This claim has been widely fact checked after Biden made the claim in his speech to a joint session of Congress in May 2021. From our fact check then:
The Tax Policy Center—a non-partisan think tank—found that while the tax cuts did benefit the wealthy, it ‘would reduce taxes on average for all income groups.’ In fact, according to their analysis 80.4 percent of taxpayers experienced a tax cut thanks to the bill, with those in the lower quintile—with an income of less than $25,000—receiving an average cut of $60 (0.4 percent of after-tax income), in the middle quintile—$49,000 to $86,000—receiving an average cut of $900 (1.6 percent of after-tax income), and in the upper quintile—$308,000 to $733,000—receiving an average cut of $13,500 (4.1 percent of after-tax income). The Tax Policy Center’s report on the matter estimated that, ‘Taxpayers in the top 1 percent of the income distribution (those with income more than $733,000) would receive an average cut of $51,000,or 3.4 percent of after-tax income.’ As Manhattan Institute senior fellow Brian Riedl has noted, this isn’t very surprising: Any broad tax reform is going to disproportionately affect the highest earners as they pay a larger share of their income in taxes and, consequently, a large percentage of tax revenue. Even as the rich benefited, so too did most other Americans. As the New York Times reported in 2019, these projections bore out. “The vast majority of people did get a tax cut,” said Nathan Rigney, an analyst at H&R Block’s Tax Institute, told the Times.