President Trump has been touting the Republican tax plan as a huge tax cut for the middle class. Don’t you believe it.
If the president and the Republicans think their tax reform plan will help the middle class they need to go back to school. Make that reform school. As usual under the Republicans the rich get the elevator to the penthouse while the middle class and poorer Americans get the shaft.
This tax plan is not reform. It’s the same old, same old. Approximately 80 percent of the tax reform cuts will go to the wealthiest top 1 percent, including major corporations. It’s the same old trickle down economics that never trickles.
Eliminating the inheritance tax will add $750 billion to the deficit, but Donald Trump’s children will get a $3 billion windfall when the old man dies. That’s not a trickle. Republicans say this tax must be eliminated to allow family farms and small businesses to be handed down from generation to generation. This can be done without eliminating the tax altogether. About 80 such entities were impacted by the tax last year. It’s a small problem which can be fixed without giving away billions to the most wealthy inheritors in America.
This tax plan, as it is now, will result in about 30 percent of those making $50,000-$150,000 paying more in taxes. The majority making $150,000-$300,000, the upper middle class, will pay more in taxes, according to the Urban-Brookings Tax Policy Center. Poorer Americans will actually get hit the hardest when the Republicans start passing measures to pay down the huge deficit created by the tax cuts for the most wealthy and corporations. Raising taxes on the middle class won’t be near enough to pay for the several trillion dollar give-a-way.
What will the Republicans do? Will they eliminate funding for Trump’s stupid wall? No. Will they raise taxes on the very rich? Get real. Trump is asking for the top tax rate to be cut to 35 percent to be included in the reform package. I guess he wants a tax cut. He’s already getting one. By eliminating the alternative minimum tax Trump could save about $ 3 million, based on the only tax returns we’ve seen.
The not so secret plan of the Republicans to reduce the deficit is to cut about $ 1 trillion from Medicaid and about $ 500 billion from Medicare. Social Security will get hit, as well as lunches for the poor, healthcare for poor kids, and destroying Obamacare. Trump has already cut funding to the insurance companies which was part of subsidizing insurance premiums for the poor. When they eliminate the mandate that young healthy folks have insurance, the cost of every one else’s premiums will go through the roof. About 17 million will lose their health insurance.
You may lose the deduction for state and local taxes, including property taxes. The jury is still out on that one. In my case I’d pay about $170 more in taxes. Those who live in a state with a state income tax will get hit hard.
Two thirds of the tax cuts will go to large corporations. Major corporations, not smaller businesses, will see their tax rate go from 35 percent to 20 percent, at a time of record profits. Actually the average tax rate is much less than 35 percent because of loopholes. Some corporations pay nothing at all. This must be done to increase jobs and wages, say the Republicans. Corporations only hire people when they need them, and they only pay what they must to be competitive. What they pay in taxes doesn’t impact either. The Wall Street Journal asked a room full of CEOs if they would make a capital investment with their tax savings, about four said yes.
Paul Ryan, Speaker of the House, said a family of four making $59,000 would get a $1,192 tax cut. That’s disputed. What he doesn’t say is when the Obamacare mandate is removed this family will most likely pay between $2,000 and $5,000 more for health insurance. They lose.
You can be given up to $10,000 on which you do not have to pay taxes. But the person who waits on you in a restaurant must pay taxes on that $5 tip you left them. Tax reform should start right there. Tips should be tax free.
It would appear that Trump voters actually believed him when he was running for office. They believed he was for the middle class. Wrong. Donald Trump is for Donald Trump, no one else. Well, maybe his kids.
Glen McAdoo, a Fallon resident, can be contacted at glynn@phonewave.net.