Posted on 11/28/2017 8:45:01 AM PST by Oshkalaboomboom
We've written several pieces debunking unfair and inaccurate attacks on Congressional Republicans' reform package of tax cuts and simplification -- from confronting bogus claims about healthcare, to swatting down supposed sweetheart tax breaks for private jet owners, to exposing scare-mongering about fictional middle class tax hikes. In addition to dispelling false information, we've also tried to highlight bona fide selling points of the proposal, showcasing independent analyses projecting that reform would boost US economic growth and create close to a million new full-time jobs. Another crucial point is that the fact that those taxpayers who currently take the standard deduction (~70 percent of all filers, a number that will grow substantially) stand to be immediate winners under the bill, as that deduction would approximately double. Mitch McConnell addressed that element of the plan in a Monday floor speech, which set the stage for a highly-anticipated upper chamber vote in the coming days:
"Our plan doubles the child tax credit, preserves the adoption tax credit, and roughly doubles the standard deduction to reduce how much income is taxed in the first place. Put it all together, and a typical middle-class family of four making the median family income could see a tax break of around $2,200. As families sit around the table to balance their budgets and plan for their future, this money will make a significant impact."
It's worth pausing to acknowledge that it would be wrong for Republicans to adopt the Democrats' approach to Obamacare by lying to the American people about the impacts of their legislation. The Left mendaciously pretended that there would be no losers under their scheme, which was thoroughly refuted by reality in short order. It's true that a small percentage of households and taxpayers -- disproportionately high-income itemizers living in high-tax blue states -- will face higher bills under the GOP plan. But the overwhelming majority will see a tax cut, with multiple nonpartisan reviews determining that on average, every income group would see their tax burden decrease under the House-passed bill. So what to make of Democrats' go-to line about the Republican plan raising taxes on millions of middle class families in a few years? This claim (repeated by the press, of course) relies on analyses of the Senate bill, under which the new, flatter, lower individual rates would expire after 2025. Thus -- on paper, at least -- a large "tax increase" would be scheduled, barring additional Congressional action.
But it's essential to point out that the only way this potential "tax increase" would actually occur is if Democrats force it to. Republicans would be on board to renew the tax cuts, especially since they're geared toward middle-income households (millionaires' Obama-era marginal tax rate of nearly 40 percent remains untouched under the GOP proposal). Democrats would therefore be the only ones standing in the way of ensuring that those expiration-caused hikes never see the light of day. If they chose to block the renewal, they would be consigning millions of working families to the sort of tax increases they swear up-and-down that they oppose. Because of those exact same dynamics, more than 80 percent of the Bush tax cuts were made permanent under President Obama. That's a highly relevant historical data point in this debate.
Remember, the whole reason the Senate bill includes a tax cut sunset clause is to comply with "reconciliation" rules, as required to pass budget-related legislation with a simple majority. If Democrats truly wanted to give middle-income families permanent stability and certainty on tax rates, they could play ball and not filibuster tax reform. They could provide the votes to make the new middle class tax cuts permanent, vitiating the need for Republicans to play around with budget windows on procedural grounds. Instead, they're digging in their heels to oppose the entire Trump agenda (even opposing pro-competitiveness corporate tax cuts they once supported) -- then exploiting the limitations imposed by their own tactics to launch misleading attacks about the Republican bill "raising taxes" after 2025. That may be cynical (yes, this obviously isn't the broader tax bill they'd prefer, but they've lost a lot of elections), but it's also how politics works. It's up to the other side to challenge quick, scary soundbytes with facts and context. I'll leave you with an excerpt from a letter written to the Treasury Secretary by a group of respected economists and academics, which is quoted in a pro-reform Wall Street Journal editorial:
The present debate over tax reforms proposed by President Trump’s administration and embodied in bills that have passed the House of Representatives and the Senate Finance Committee has raised the basic question of whether the bills are “pro-growth”: Would the proposals raise current and future economic activity and generate federal tax revenue that would reduce the “static cost” of the reforms? This letter explains why we believe that the answer to these questions is “yes.”...You have consistently stressed that the objective of tax reform should be to enhance prospects for increased economic growth and household incomes. We agree with this objective, which is consistent with the traditional norms of public finance going back to Adam Smith. We believe that the reforms embodied in the House and Senate Finance bills would achieve this objective. The increased growth, in turn, would lead to greater taxable income and federal tax revenues, which would reduce the static cost of lost federal tax revenue from the reform. And here's John Thune, a member of the Senate GOP leadership team, predicting on Fox News Sunday that the Senate bill will pass:
It's crunch time.
Bookmark
In NYS that 's a household with a teacher and a cop. That's not what Trump promised. It's VERY disappointing.
LOTS of people in NY, CA, IL, CT, MD, and other high state and property tax states did 40 years of financial planning for retirement based on the deductibility of those taxes. Many of those people are going to get hit with THOUSANDS of dollars per year in tax increases, completely wiping out retirement plans. How do you make up $2,000 to $5,000 per year tax hikes on fixed income? If you live 20 years in retirement in a high-tax state, you are going to pay $40k to $100k more in taxes!
Expect lots of retirees who didn’t want to move are now going to be forced to move to a different state. If you are in a position to invest, expect property prices to decline in high tax states and rise in low-tax southwestern states.
For fairness, changes this big should be phased in. One set of rules if you are over 60, another set for each decade less than 60. Those starting out in their 20s or 30s have a lifetime of earning ahead of them and can plan for no deductibility of state and local taxes. You don’t have that luxury if you’ve recently retired or were planning to retire soon. But “fairness” is not something you expect out of the stinking government.
I’ve never seen a screw job this big from any Democrat. I never dreamed that Republicans would eff us over this badly.
How The Plan Became Policy
In the Beginning was the Plan
And then came the Assumptions
And the Assumptions were without form
And The Plan was completely without substance
And the darkness was upon the face of the Workers
and they spoke among themselves, saying
“It is a crock of sh*t, and it stinketh.”
And the Workers went unto their Supervisors and sayeth
“It is a pail of dung and none may abide by the odor thereof.”
And the Supervisors went unto their Managers and sayeth unto them,
“It is a container of excrement and it is very strong,
Such that none may abide by it.”
And the Managers went unto their Directors and sayeth,
“It is a vessel of fertilizer, and none may abide by its strength.”
And the Directors spoke among themselves, saying one to another,
“It contains that which aids plant growth, and it is very strong.”
And the Directors went unto the Vice Presidents and sayeth unto them,
“It promotes growth and is very powerful.”
And the Vice Presidents went unto the President and sayeth unto him,
“This new plan will actively promote the growth and efficiency of
this Company, and these Areas in particular.”
And the President looked upon The Plan,
And saw it was good, and The Plan became Policy.
This is How Sh*t Happens.
They'll all move to Florida!....................No State Income Taxes!...................
It raises taxes on those of us paying alimony.
What does Steven Moore think? I’d think his opinion counts most. Naysayers on our side may have that ‘I’m smarter’ gene in them.
It won’t only be conservatives fleeing to lower tax states. And when they get to your state they will still want their government.
Blue states hardest hit. :)
I have not itemized in well over a decade. It is by design. This will actually save me some money. But more importantly, it stops incentivizing bad activity and DOES meet his promise to simplify taxes. For those who used to itemize, but this takes that need away, their taxes are simplified. Of course, it may not be how they wanted it to happen. :-)
Gee, maybe they can get some sort of state income tax reform done. :)
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They already do.
Miami, Orlando, Tampa and St.Petersburg are all full of Northerners fleeing the hellholes they created and now vote the same way. They just don’t realize THEY ARE THE PROBLEM..................
$22000 in salt.... that NEVER goes down
plus an 8.625% sales tax
elimination of salt wil cost me +$3k in fed taxes
THEY CAN PUT THE “TAX REFORM BILL” you know where...
I will lay off my employees and do consuting only...
How does that grow the economy?
forget tax “reform” because it is not tax reform whatsoever...
real tax reform would eliminate all deductions and exemptions and be a 10% tax on what you earn.. from any source... billionaires would pay the same rate as a waiter...
besides Buffet owes $3 billion in back taxes and Soros owes $18 billion which shows the farcical nature of the IRS and tax colection focusing on the little guy...
HOW ABOUT CUTTING GOVERNMENT SPENDING BY 10% and not giving a lifetime pension for one term in congress and eliminate all the serect payola schemes like paying off sexual abuse claims with taxpayer funds... amd all the other perks which are tax free and they can trade on inside info to boot... you and i cant...
they drive us deeper in debt and waste 33% of what they spend... at a minimum and maybe more...
we ALL need lower taxes...
people, you might get a bit of tax relief this year or next but you will eventually get a screw job and you'll look back and wonder why we let this happen....
So, can any of you opposed to this plan describe how you would get your dream plan enacted with zero democrat votes? You know perfectly well you can’t get any of these dream plans through the Senate so quit complaining.
“It’s true that a small percentage of households and taxpayers — disproportionately high-income itemizers living in high-tax blue states — will face higher bills under the GOP plan.”
So, that makes it a tax cut for some and a tax increase on some?
How about the two-income itemizers in North Carolina that are paying a lot of SALT? Are they getting a tax cut or a tax hike? Same with Utah and Texas.
In those state and several others more than 25% of taxpayers itemize.
They will not only lose their not insubstantial SALT deductions, they will also lose ALL dependent exemptions!
Anyone who thinks the increased standard deduction will cover that gap cannot count.
Millions will see a net tax increase and they will reside in every state in the union.
Disproportionately in blue states, but in every state in the union.
And these people are the backbone of the Republican party. The suburban volunteers and contributors. And solid Republican votes.
“I’ve never seen a screw job this big from any Democrat.”
No Democrat has even PROPOSED a tax increase on the scale that Republicans are going to deliver to me.
“people, you might get a bit of tax relief this year or next but you will eventually get a screw job and you’ll look back and wonder why we let this happen.... “
Not likely.
Most of them are so emotionally invested in “screwing the blue states” that no matter the final outcome of the bill down the road, they will not allow themselves to believe the tax increase they see had anything to do with this bill.
Too much cognitive dissonance.
Like Democrats and Social Justice Warriors everywhere, it’s an emotional subject for them. And it will always be.
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