President Trump and Congressional leaders have promised Americans Christmas presents including lower taxes for everyone and raises for the working middle class averaging $4000 per year. Even Santa can’t match that magic.
As I draft this column, the plan is that Republican leadership will propose a new tax law to the House Ways and Means Committee (whose job it is to draft tax laws) on November 1 with a request that they approve it in a matter of a few days. It is being prepared in secret by two cabinet members and four politicians who are leaders in the House and Senate. They’re all male, all white, and all Republican so we don’t need to worry. They know what’s best and they’ll take care of us.
The goal of the bill’s authors is to get it passed before the end of 2017, allowing less than two months for committee hearings, expert analysis, and public opinion. They say that they want to move quickly before lobbyists put on too much pressure for special interests. Maybe they’re also concerned about having those pesky town hall meetings where noisy constituents ask hard questions.
The tax proposal is supposedly derived in large part from the House of Representatives GOP Tax Plan so we can look there for a preview. It was evaluated meticulously by the Brookings Tax Policy Center. They created a straightforward estimate of the bottom line change in taxes for Americans at all income levels. Naturally some of us will fare a bit better than others. You can check this chart to see how much help your family would get. CLICK HERE for the entire Brookings report.
| HOW HOUSE GOP TAX PLAN AFFECTS FAMILY INCOMES | |
| Income Level | Average tax saving/year |
| Lowest 20% | -$50 |
| Middle 20% | -$260 |
| Highest 20% | -$11,760 |
| Highest 1 % | -$212,660 |
| Highest 0.1% | -$1,262,530 |
| SOURCE:
http://www.taxpolicycenter.org/publications/analysis-house-gop-tax-plan/full |
|
You may recall that our federal budget already runs a large annual deficit. Republicans plan to borrow more money to make up for the tax cuts. In order to get your tax savings, your share of the additional borrowing will be about $4600 per person plus annual interest at about 3 percent. Republicans no longer worry about debt since President Trump explained that if the economy goes bad, we can “make a deal” to cover the debt. These guys are so smart about money that they know how to make debt disappear. They’ll do what’s best for us.
President Trump says that the extremely rich people will invest their tax savings and that will create more jobs. If there are more jobs then there will be more demand for workers so everyone’s wages will go up by an average of $4,000 per year. Mr Trump said that we can be confident; it’s actually middle class and low-income people who will benefit most from this plan. It’s so beautiful that it makes me want to sing along with Merle Haggard’s old song, “We’ll all be drinking that free Bubble-Up and eatin’ that rainbow stew.”
The new law would also make changes to corporate taxes; something that most knowledgeable people agree is needed. Isn’t it great to have such hard-working leaders applying the skills they learned at places like Goldman Sachs so that we don’t have to listen to experts or think for ourselves? It’s especially considerate of our six great leaders to get all the work done so that the congressional committees that would otherwise need to carefully consider the law can be finished with it in time to enjoy the holidays with their families and friends.
Merry Christmas to all Americans from your congressional leadership – always doing the thinking for American families and protecting their interests. In case you’d like to send them a “thank you” note, they are Treasury Secretary Steven Mnuchin, Trump economic advisor Gary Cohn, House Speaker Paul Ryan, House Ways and Means chairman Kevin Brady, Senate Majority Leader Mitch McConnell, and Senate Finance chairman Orrin Hatch.
One parting thought – this is the time when Americans must decide whether we want to live our “wonderful lives” in Pottersville or Bedford Falls. (Many references are to the movie “It’s a Wonderful Life” – as inspiring today as ever.)
ADDITIONAL READING: https://www.politico.com/story/2017/09/27/everything-you-need-to-know-about-the-big-6-tax-plan-243205
Bob, I met David Stockman once, nice serious financial advisor to President Reagan. Every administration needs somebody with a PHD to elaborate on the party in power’s reason for changing the tax code. Congress always ends up spending more than the government takes in but the Conservatives have a great story; “tax cuts to cover the deficit”! No wealthy person just sits and counts their money, they buy up stock, they add to their mansions in remote scenic places, they buy out companies that are doing well and fire all of the upper management. With the tax cuts they buy their current wives special gifts like a larger company aircraft. Now the economy begins to rise and viola, no deficit.