Yes, I’m probably going to anger a few folks, but I just can’t seem to let some of these frequent posts go unanswered. Why? It’s probably because I’m old, cranky, and don’t have a high tolerance for BS. You folks know who you are, because you keep regurgitating the Democrat talking points from the popular sources and any other possible source of disinformation. [Don’t believe a word I say – read the actual Tax Bill – I included the link at the bottom of the post]
TAX REFORM ACT –
“By a 51-48, strictly along party lines, the US Senate has passed a GOP-backed tax reform package that will cut taxes for more than 80 percent of all Americans (raising taxes on a tiny, disproportionately wealthy fraction), benefit small businesses, and make America’s extraordinarily high corporate tax rate — both statutory and effective — far more internationally competitive.”
Let’s start with what it isn’t — It’s not a giant step toward tax reform. As a matter of fact, it has some serious flaws, some of these changes don’t solve a darn thing, except as a political attempt by the Republicans to say, we got something done. It does however help many that its intended.
The main things it won’t solve; the national debt, it may even add to it, but that’s not its major flaw because the only way that problem will go away is through serious reductions in spending and assessing what our priorities are as a nation. I can tell you, if these politicians ever did get serious about debt reduction, the howling would be heard in other countries.
The other point I will make is there’s never going to be a perfect tax bill. Many people have been arguing for a Fair Tax system for years. It’s been rejected. It’s not a matter of how strongly you feel about it, the fact is, it’s never going to be passed, primarily because the left would see it as a regressive tax.
Now lets talk about what bothers me with so many Social Media posts on this topic.
The Democrat strategy wasn’t one of, lets bring our proposal forward to see what the public thinks. It was about class envy, trying to create a public opinion that only the evil rich will be the main beneficiaries, while everyone else has to take up the burdens of the national debt.
According to the CBO, the ~ 39% (combined federal and average of state and local rates), United States has the highest marginal corporate tax rate in the OECD and the third highest in the world. I can almost hear the collective eyes roll on this point. So what you may think? These corporate fat cats need to pay more. We’re tired of Corporate welfare, etc.
Let’s start with the basics of what a corporation is, and isn’t. It’s not the heirs of the Walmart stores (Waltons), the Koch brothers, Mobil Oil, whomever. A corporation is legal identification of a business. A means to hold together a business, control it as a single entity, totally separate from individual officers & staff who may come and go. When a corporation is taxed, it’s the entire business, which passes the costs of taxes on to it’s customers along with all the other expenses. So, if you’re mad at a company, you really just pass that litigation and taxation cost to all of its customers. Of course if a company can charge at a consistent rate, even if it can lower it’s overall operations cost, it’s going to make greater profits. This disturbs some people, but it’s a simple fact.
This is where the tax bill was trying to alter the playing field for corporations to keep making profits, but also, for the large ones to reconsider their overseas management / tax havens. Yes, the large ones do place their offices in more favorable taxed countries. The Republicans want them to move back, and if you recall, President Trump talked to several major automakers and other large industries early on, to bring back more domestic jobs. Yes, I know Trump has clothing in offshore manufacturing. Don’t look for absolute perfection.
Here’s the thing that keeps getting ignored, there are over 100 times more small businesses than large ones. They pay the same tax rate and they’re also the ones that overall employ more people than those with over 500 employees. So if you have just a handful of employees, a reduction from the mid 30% down to a low 21% is going to help. That’s the real focus of the bill, not the political party claim to it’s minions… `Republicans just want to create tax giveaways to the rich.`
President Barack Obama called for a reduction in our uncompetitive corporate tax rate. His proposed cut was smaller and structured different than the Republicans bill, but Obama agreed the existing rate was too high.
The anti-Trump analysts quickly weigh in. It reminds me of the Great Karnak. Lets see if any of their predictions come true. One thing that could be counted on even before this is passed, the annual debt is going to rise at just over the $1 Trillion level. It hasn’t a thing to do with the new tax act even though they want to tie the two together. The problem is and always has been, spending at a rate far greater than revenues.
- The Tax Policy Center found that the bill would only boost GDP by 0.7% in 2018, well short of growth promised by Republicans.
- The bill would also add $1.23 trillion to the federal deficit over 10 years, even when adding in new revenue from economic growth.
About 70 percent of all US taxpayers currently take the standard deduction. This deduction will approximately double in the newly passed bill.
Independent analyses found that the proposal would (a) result in net tax reduction for average taxpayers and households across all five income groups, including middle-income families, (b) create nearly one million new, full-time American jobs, and (c) boost US economic growth. The average household of four people, based on national median income, would save nearly $1,200 on their tax bill next year.
Does the new law cut Medicare or stop payment for certain cancer treatments? The short answer is no. There were OMB provisions passed well before Donald Trump took office, which have triggers altering the funding to Medicare should spending levels exceed specific thresholds. * Paul Ryan stated that if this were to happen, Congress would act to prevent this from occurring.
What does that have to do with cancer treatment? In 2013, when Medicare faced an automatic 2 percent cut under the sequester, some cancer clinics told the Washington Post that they couldn’t afford to continue administering pricey chemotherapy drugs and still stay in business. The Post‘s Sarah Kliff wrote: “Cancer patients turned away from local oncology clinics may seek care at hospitals, which also deliver chemotherapy treatments.”
“Oncology clinics are again concerned about a potential cut to payments they receive from Medicare for these cancer drugs.” The Community Oncology Alliance, a nonprofit advocacy group for these practices, said in a Nov. 30th press release, that a further cut “will reduce access and increase costs for patients.”.
Once again, this was politics being played out through Democrat sympathetic news organizations. Designed to stir up the base, it did so for a while. This is not what the tax bill would do. There’s certainly concern, however, about the pay-go spending cut trigger and the potential impact.
* McConnell and Ryan issued a joint statement on Dec. 1, saying Congress would waive the pay-go requirement.
The sunset provision was necessary to meet the Byrd Rule requirement (adopted in 1985 and amended in 1990) that only allows Senate legislation to be passed with a simple majority if it does not result in net tax cuts beyond a 10-year period (otherwise, it requires 60 votes to prevent a legislation-stopping filibuster).
“1986 was a marquee year for tax reform. Back then, Republicans controlled the White House and the Senate, and Democrats controlled the House. Neither party was in a position to dictate the terms, and any legislation passed was, by definition, a compromise. The result was the Tax Reform Act of 1986, signed into law by President Reagan on October 22, 1986.” The Hill 27 August 2012
- Tax Reform Act Final Bill – You might not have asked for it – It’s 1097 pages (including covers)
- The Waltons – A family for people to obsess over what they do with their money.
- Ways & Means Committe – Tax Bill Report
- Individual Tax Regs for 2018 – Still a lot to consider