Median family income statement rated ‘half true’

Under the House Republican tax proposal, “the average family of four earning median income ($59,000/year) will receive an additional $1,182 in their pocket every year.” — Rep. Drew Ferguson, R-Ga., on Sunday, Nov. 5, 2017 in an email to a constituent

We found his statement exaggerates how long the average family of four will enjoy those tax savings.

Under the new tax bill, the family would take a larger $24,000 standard deduction, leaving $35,000 in taxable income. At the 12 percent rate, that would mean $4,200 in preliminary liability. This would be offset by $3,200 in child tax credits and $600 in family credits, leaving a final tax liability of $400. That’s a $1,182.50 tax cut. So Ferguson has some mathematical detail to back up the figure.

But that’s not the end of the story.

The GOP bill eliminates or shrinks a number of widely used itemized deductions. Also, the benefits of the tax proposal shrink, slowly but surely, over the next decade for the type family Ferguson cites.

Our ruling

Ferguson’s statement is based on a plausible and transparent calculation, but he glossed over some context. The calculation doesn’t factor in several itemized deductions that would disappear under the proposal, which could have a significant impact on at least some families around that income level. And the statement is misleading when it says the family will save $1,182 “every year,” since that’s true for the first year only; after that, the benefit starts to shrink and eventually turns into a tax hike.

We rate the statement Half True.

Rep. Drew Ferguson, R.-Ga., exaggerated how long the average family of four will enjoy their tax savings.