Right now I don’t plan on writing anything about the new Tax bill until the final Senate legislation is set and I have had time to read and research it. There are too many changes that are coming before the bill is voted on and sent to the President.
One thing I hope doesn’t change is the provision to double the standard deduction for individuals and families. For those who make a relatively small income, yet above the poverty line, the new deduction can make a big difference.
Many Americans don’t experience any significant financial activity that would warrant itemizing deductions on their tax return. For those that file the short forms 1040A and 1040EZ, the larger standard deduction would directly have a positive effect on their tax liability.
As far as the rest of the Republican’s congressional plans, you don’t have to be a mathematician or economics expert to see who disproportionately benefits.
As it stands now, the estimated cost for lowering taxes, mostly for the wealthy, is around a trillion and a half dollars strung out over the next several years.
The idea that the Republican party would even consider passing laws that benefit the wealthy at the expense of the tax payors baffles me. I have always thought that a core principle of the party includes conservative fiscal management.
The whole concept got me thinking. Years ago when I was in the hotel and restaurant business, we would have strategy meetings where we would pitch ideas for increasing revenue. During one meeting, the boss was asking for suggestions from a kitchen manager. The idea he came up with was to offer wings at a discounted price for the happy hour crowd. At the time, it didn’t seem to me like it was such a bad idea. Chicken wings are cheap, right? He figured we could sell ten wings for a dollar. The problem was that our cost for them was around twenty cents a piece. That turned out to be a bad idea that would have cost us money, not make it.
What would this have to do with taxes? Hear me out. How many jobs can you buy for one point five trillion dollars? Given the fact that Reaganomics produced very little in the way of trickled down jobs, couldn’t we assume that the same will happen with this new plan? If you add in the increasing cost of housing, utilities and healthcare as well as the repeal of many deductions that are important to the middle class, how much would the average American benefit? Additionally, the American people will be saddled with the enormous increase in the deficit.
According to those who are in the know, the deductions for regular Americans will sunset in 2027 while the corporate tax provisions stay the same. The truth is that the tax benefits that are supposed to end will most likely be extended by congress. Wouldn’t that just add more to the deficit?
It is also my understanding that large corporations would most likely pay taxes in the sixteen to eighteen percent range, not twenty.
Anyhow, my hope is this should give you cause for contemplation. My point is that I think that the tax cuts for the wealthy and large corporations would be like selling them twenty cent chicken wings for ten cents.
Our revised tax codes should be reworked to actually benefit the working and middle class in our country. Sooner or later the jig will be up for those in the legislature who are making every effort to take care of their special interests and donors.
Unfortunately, I don’t have confidence that President Trump is capable of being involved in the mechanics of such complicated legislation as the tax bill. Conversely, I do beleive that the Koch brothers and the Mercers are very well versed in every detail given the fact that they are directly involved.
I have read the house bill. The PDF version of H.R.1 is almost 450 pages long, so It’ll be awhile before I can digest the Senate plan. Also, I couldn’t find the Democrat’s contributions. I guess we will be able to check them out after the Republican’s bills are passed into law (sarc.).
I strongly believe that changes to major issues like tax reform have to be intertwined between both parties to succeed. As I have said in previous posts regarding congress and the future of our country… If they can’t get it together, the Millenials will.