Saturday, May 6, 2017

So Called Tax Reform is next

Now that the House has passed the buck to the Senate they will likely take up Tax Reform.
Some of President Trumps napkin plan I agree with,

  • Getting rid of almost all deductions  and doubling the standard deduction to make up for that. We should not need tax experts, accounts or lawyers to fill out individual tax forms.
  • Going form 7 to 3 tax brackets, Its not like 7 is that much more complicated.  Trying to find all your deductions was the harder part of the tax form.But ok this is fine.
  • I am also ok with lowering the top bracket from 39% to 35%
However some parts I do not agree with.
  • Lowering S corporations to 15%, this is really a way for individuals who invest in real estate and hedge funds to declare the income in a different way and avoid regular income tax.  it is not designed to help large or small business. Now I do not believe in punishing the wealthy.  However why is it republicans want the lower income tax brackets to pay one way and the most wealthy people to pay a different way? Because A) Many of them are multimillionaires and the B) They want the bribes from the wealthiest Americans (and foreigners).
  • Getting rid of the Estate tax.  Mixed feelings here, if they were paying normal income tax I would be fine with getting rid of it but the Estate tax was put in place to prevent us from getting a rich Aristocracy or Noble class where wealth is simply inherited and builds so that only the few win, not the majority. As long as the very Wealthy are paying less in taxes than the average American I think we should keep this in place.  Pundits claim this will help small farmers but that is not really true. The Estate Tax comes with a $2 million tax credit so you have to have an estate over  $5 million would pay anything.
  • Getting rid of the Alternative Minimum tax.  this is in place so that those who find enough loopholes to avoid paying income tax still have to pay at least something.
  • The Tax holiday,  We have tried this before and it does not grow the economy.  Instead of hiring more workers companies use the savings to buy back stock (so Wall Street will win big) and pay higher executive bonuses and stock dividends.  I have no real problem with that except that it will be paid for by the taxpayer.
Overall this is just more Trickle Down and Voodoo Economics which we have seen before and will increase the national debt by giving more tax breaks to the wealthiest Americans and take away rather than create new jobs.

Tax plan explained
A more detailed version of the Trump plan on Trumps website Note that in this one he lowers the upper bracket from the 35% proposed in the first briefing to 25$

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