Merriam-Webster notes that a tax is “a charge usually of money imposed by authority on persons or property for public purposes.” Investopedia defines a tax as “an involuntary fee levied on individuals or corporations that is enforced by a government entity, whether local, regional or national in order to finance government activities.”
Items taxed by the federal government — those only relevant to the tax plan being proposed — are predominantly personal income by workers identified by our government as legal citizens, or income as a result of the sale of a product or service through a business or corporation. Fees are also a type of tax collected on transactions or products that may generate a cost to the government through a license, the need for oversight or regulatory action.
In 2016, the U.S. Treasury collected $3.3 trillion in federal taxes. Of those collections, 47% came from personal income taxes, 37% from Social Security taxes, 11% in corporate taxes, 3% for excise taxes that apply to the purchase of certain products and 1% each for both taxes collected on estates at death and custom duties from international trade.
It’s pretty obvious that our government spends off the backs off workers, not the poor as alleged by the Left. Sadly, that also means that it’s through the mandatory confiscation of wealth from those who produce that government programs are funded. But, now, what about that Reagan quote? Do we really want less work and less productivity?
So, what does the GOP tax plan mean, not just to Wall Street, but average workers of the middle class on Main Street, that rely on mortgage deductions and charitable giving write-offs? Is there truly a working-class benefit, as claimed by Republicans?
In proposing to take seven tax brackets and simplify the system to only four, it does make tax preparation easier, but in examining these tax brackets, the lower two stratifications seem to enjoy real tax relief. Those individual workers making up to $200,000 annually will be in the second lowest bracket of 25% along with those married filers reporting up to $260,000 in income. In the lowest tax bracket of 15%, individuals reporting $45,000 annual income and married filers up to $90,000. These bracket reforms coupled with the doubling of the individual and married standard deductions benefit the working class.
Even The Washington Post awarded four Pinocchios to Senate Democrats’ fearmongering that the working class would be hit with a tax increase. In their analysis, they note that “you will see that every quintile on average receives a tax cut — not a tax increase.”
But a system reformed means a system changed. While many have grown to enjoy certain deductions, the GOP plan does include significant changes regarding a couple of very traditional write-offs. The charitable contribution write-off remains unchanged from current law. Those giving to qualified charities and churches will see no change in that reporting — save only that the increased standard deduction means fewer people will itemize their charitable contributions.
The loudest opponents’ challenge seems to originate from the real estate and mortgage industries. The current deduction of the interest on the first $1 million borrowed for a home is set to be capped at $500,000 for new home purchases and has been completely eliminated for any other homes that are not primary residences. A second point of opposition is the cap of deducting property taxes leveled by one’s state and local government.
The talking points to dispute these changes are that capping the mortgage interest deduction destroys the American Dream of owning a home. That’s especially true, critics say, with the cost of homes being so high in some regions.
Yet according to Forbes, “What the Republican Tax Bill Means for the Value of Your Home,” the median price of an American home sold today is $245,000, falling well within the capped limit of $500,000. Again, The Washington Post breaks out some real reporting citing an August 2017 report by United for Homes. Only 6% of new mortgages are valued over $500,000 with an accurate statement that “the rhetoric about middle-class families is largely at odds with the reality of who actually owns half-million-dollar homes in the U.S.
Addressing the capped deduction for property taxes at $10,000, the data supports that the average family who itemizes their tax returns will be untouched by this change. According to USA Today, "each of the country’s 84 million single-family homeowners paid an average of $3,296 in property taxes.”
Be advised that those yelping the loudest on this last change find themselves in the bluest of blue states. Residents of New Jersey have the highest average of $8,477 paid annually in property taxes, with New York at $7,013 and Connecticut at $6,963. The moral to this story is that big blue governments have depended on the ability to increase property taxes knowing the federal government would permit a deduction. Those raising property taxes will now need to think again to appreciate they hold more accountability to voters who produce within their states.
The facts are indisputable, despite the best efforts of the Left whose only tools are protest and fear. If you pay taxes, you’ll likely get a tax cut. If you make more than $1 million, you may not get as large a tax cut, and, because of closing tax loopholes, you may actually pay more overall. But are the Democrats satisfied? NO!
Why? Their argument comes from their claim that the total sum of workers’ earnings set to be confiscated for the Treasury in the form of taxes and the poor will foot the bill. Let’s return to Reagan.
First of all, if you don’t pay taxes — the poor — you’re not paying for anything. Tax cuts are for those who pay taxes.
Further, with the Reagan tax cuts in the 1980s following the Carter economy, the economy doubled, growing at an average of 3.5%, which confounded those who claimed the U.S. Treasury would have revenues depleted. Incoming monies to the Treasury actually doubled due to the economic upturn and expansion.
Let’s agree that it’s a good thing for the government to have less money to spend. Let’s also agree that taxing the productivity of Americans less is a very good thing. And we must agree, too, that it doesn’t matter what Republicans do, the Left will never approve tax cuts in fear of losing power over the dependents upon subsidized living. Do we want more of that? ~The Patriot Post