President Donald Trump on Tuesday delivered his first State of the Union address, and CNN’s Reality Check Team was there to vet his claims.
The team of reporters, researchers and editors across CNN listened throughout the speech and analyzed key statements, rating them either true, true but misleading, and false.
Tax cuts
Biggest tax cuts in history?
By CNN’s Jeanne Sahadi, Sam Petulla and Tami Luhby
Trump thinks everything he does is huge. Tax reform is no different.
“Just as I promised the American people from this podium 11 months ago, we enacted the biggest tax cuts and reform in American history,” he said. “Our massive tax cuts provide tremendous relief for the middle class and small businesses.”
Tax analysts and Treasury data, however, contradict the assertion that the tax cuts included in the Tax Cuts and Jobs Act are the biggest in US history.
As a share of the economy, four other tax cuts have been bigger than Trump’s since the 1960s: Those of President John F. Kennedy’s passed in 1964, President Ronald Reagan’s 1981 tax cuts, and the 2010 and 2013 tax cuts under President Barack Obama, which included making permanent earlier tax cuts signed by President George W. Bush.
It’s unclear how the White House is measuring “reform.”
“Reform is a much more subjective measure, so it is hard to rate,” said Howard Gleckman, a senior fellow at the Tax Policy Center.
Generally, tax experts define reform in one of three ways, he said. Replacing the income tax, simplifying the code and lowering rates in exchange for getting rid of most tax breaks. By those measures, Gleckman said, the Tax Cuts and Jobs Act falls short. It retains the income tax. It simplifies the code in some ways but further complicates it in others. And while it lowers rates, it also retains most tax preferences from the previous tax code.
As for the tax cuts themselves, they are notable, although not enormous for many.
The middle class, for instance, would see tax cuts on average, especially in the next five years. But they would be modest — with an average increase below 2% in after-tax income. By contrast, higher income households would see an average bump in after-tax income north of 2%, according to the Tax Policy Center.
Plus, for most middle-income groups, their tax cuts will start to diminish and then disappear completely, since individual tax cuts and other benefits would expire after 2025. Republicans say they will extend the individual tax cuts beyond that date.
Verdict: False.